Finance minister Tito Mboweni was braced for a potential backlash from ratings agencies after unveiling a budget that pledged to plough R69bn into Eskom over the next three years and predicted the budget deficit would surge to the widest in a decade next year. That figure could grow to R150bn over the next decade, Treasury officials said separately. The initial market reaction was swift, though both the rand and government bonds later recouped losses that followed Mboweni’s announcement that the budget deficit would climb to 4.2% of GDP in the current year and reach 4.5% in 2020. It was at 3.7% in 2016. Government debt will peak at a higher level, with the debt-to-GDP ratio set to reach 60.2% in 2023/2024, compared with the previous estimate of 59.6%, he said. Fifteen minutes after Mboweni started speaking, the rand slipped 2.3% to R14.3661/$, the weakest level since early January. At 5pm it fully recovered to R14.0186/$, which was 0.18% stronger than on Tuesday. The yield on the R1...

Subscribe now to unlock this article.

Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).

There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.

Cancel anytime.

Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.