An interesting budget for an interesting year
Tito Mboweni has a difficult task in next week’s budgetwith the economy so weak and the ever-present Eskom issue
2019 is shaping up to be an interesting year. Finance minister Tito Mboweni has a tough task ahead of him as he seeks to present a budget that will meet with public approval ahead of the national election, while also coming to terms with the pressing need to grow SA’s economy. At last year’s medium-term budget policy statement, delivered in October, the minister spoke of the need to reform and stabilise state-owned enterprises (SOEs). The state faced a R27.4bn revenue shortfall for 2018, and an R85bn shortfall over three years. Debt service costs are expected to grow by almost 11% every year, from R181bn in 2018-2019, to R247bn in 2021-2022, according to the med-term budget. SA’s GDP is expected to grow 1.3% this year according to the World Bank’s January forecast — higher than last year, but still a concerning rate. There are also fears that Moody’s, the only agency to rate SA above junk status, may drop its rating and the budget speech will be a key factor Moody’s will weigh up, a...
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