Fiscal credibility means economic agents believe what the fiscal authorities announce as their target primary budget balance, and that they will achieve it in the time frame they set. SA’s fiscal credibility has deteriorated since the financial crisis, and the risk remains that this could persist if Treasury continues to miss its budget targets.

As part of tabling a balanced and sustainable budget, the 2020 Budget Review must aim to re-establish fiscal credibility, which has huge implications whenever it is lost.

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