GINA SCHOEMAN: Relative to earlier pessimistic views, budget was better than expected
Credibility of fiscal plan keeps investors and citizens willing to wait and see
A slightly adjusted version of a well-known John Maxwell quote speaks to SA’s fiscal path rather well: “Credibility is a country’s currency. With it, it is solvent. Without it, it is bankrupt.”
The 2021 budget was certainly better than expected relative to the Treasury’s far more pessimistic view back in October 2020. The budget deficit is now narrower as a percentage of GDP than before, but still the widest it’s ever been. The Treasury continues to push for debt stabilisation, thankfully at a lower peak of 88.9% of GDP in 2025/2026, and the one thing that keeps investors, citizens and other stakeholders willing to wait and see is the credibility of the fiscal plan to get there...
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