July budget gap biggest in 14 years
For the fiscal year to date, the accumulated deficit is R5bn less than in 2017
SA’s budget deficit in July was the biggest since at least 2004 as weak economic growth constrains tax collection. The economy recorded a budget gap of R95.98bn, the Treasury said in a statement on Thursday. July readings have reflected the biggest shortfall each year since 2010. For the fiscal year to date, the accumulated deficit is R5bn less than in 2017. The economy contracted in the first quarter and the current-account deficit widened, highlighting the country’s vulnerability to capital outflows. Mining production, once the engine of the economy, has slumped, and manufacturing and consumer spending have struggled to pick up the slack. A widening budget gap limits President Cyril Ramaphosa’s ability to boost infrastructure and social spending. "There seems to be a persistent underperformance in corporate income tax collections, and buoyancy levels haven’t improved as much as the National Treasury had hoped because of the weak economic climate," said BNP Paribas economist Jeffre...