Finance committee worried about ‘overestimated’ growth projections by Treasury
The Treasury needs to propose effective measures to mitigate the likelihood of fiscal risks materialising and affecting the broader economy, the committee says
Parliament’s finance committee says the Treasury’s overestimation of GDP growth forecasts will negatively affect the fiscal framework. The committee said this in a report on the fiscal framework, which was outlined in the medium-term budget policy statement (MTBPS) tabled in Parliament in October by finance minister Tito Mboweni. The committee, chaired by Yunus Carrim, adopted the report on Tuesday, after public hearings on the budget statement. The Treasury has revised its growth forecast for 2018 to 0.7%, down from the 1.5% projected in the February budget. It has defended its forecasting saying in a briefing to the finance committees last week that it was not overly optimistic or pessimistic relative to other forecasters. “Several studies have found National Treasury forecasts to be on a par with, or better than market projections,” acting deputy director-general in the budget office Ian Stuart told MPs. But in its report on the fiscal framework, the finance committee recommended...
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