It will be interesting to see if the finance minister blames apartheid for the fiscal trouble that the medium-term budget policy statement on November 1 will have to clean up. Thankfully, the Treasury holds itself to a higher credibility bar than others, though. Instead, we are likely to get some more sober analysis and action.

The origins of this mess are interesting, because there are actually no surprises here. The wage bill settlement was marginally below what we thought it would be at the time of the budget and didn’t really come in any different from what the bond market was expecting. There have been no upside surprises in SOE bailouts and broader spending on a monthly basis is about where we thought it would be in the most recent data. Revenue similarly was expected by the bond market to be well below where the Treasury had pencilled it in at the budget. ..

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