The 2020 budget tax and expenditure proposals are steps in the right direction for the SA economy. Holding the line on real government spending and avoiding a growth-defeating increase in tax rates is part of the right mix of policies.

The SA economy is hostage to fortune as well as to its economic policy proposals. Market reaction to the coronavirus overtook the budget proposals, which were initially well received in the marketplace. RSA 10-year bond yields were 8.76% per annum the day before the budget and 60 basis points lower immediately after the budget news. They were up to 9.1% on March 2, declined to 8.76% on March 4 after the US Federal Reserve (Fed) cut its benchmark rate by 50 basis points to prevent coronavirus fallout — US 10-year Treasury bond yields dropped to 1%...

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