MEDIUM-TERM BUDGET
HILARY JOFFE: Gigaba has no rabbit to pull out of his hat
Going into next week’s medium-term budget, the one thing that is crystal-clear is that it is impossible for Finance Minister Malusi Gigaba to deliver on his promise that he will stick to the path of fiscal consolidation outlined in the previous budget. What, if anything, he plans to do about it is the big question economists and ratings agencies are asking. And a presentation last week by S&P Global’s lead sovereign analyst for SA, Gardner Rusike, highlighted the fiscal concerns that could prompt further downgrades, if not now then in 2018, after the ANC elective conference and the February budget. Gigaba’s first budget has attracted a lot of attention; many economists have already released their previews, with varying estimates of just how far revenues will fall short of budget targets. Citi economist Gina Schoeman’s R33bn is one of the lowest, with others pegging it well above R40bn. Most now expect a deficit of more than 4%, not the 3.5% projected in February.Rusike flagged slowe...
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