Tito Mboweni braced for backlash from ratings agencies
Treasury roadshow hopes to sell budget upside after ‘very difficult conversations’ with agencies
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.
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From tough talk on saving Eskom and Sars, to increases on tax on alcohol and cigarettes - we take a look at which aspects of Finance Minister Tito Mboweni’s 2019 budget will hit close to home.