SA’s fiscal 2022 budget deficit narrower than estimated at 5.2% of GDP
Revenue was buoyed by higher corporate income, thanks to a rally in commodities, and VAT, while income exceeded estimates by R12.2bn and spending undershot forecasts by R9bn, Treasury says
SA’s main budget deficit for the 2022 fiscal year was smaller than the government’s estimate after better-than-expected revenue collection and spending that undershot projections.
Africa’s most industrialised economy recorded a shortfall of 5.2% of GDP on its main budget — which excludes total spending by provinces, social security funds and some state entities — for the year through March 2022, the National Treasury said in an emailed response to questions on Thursday. The monthly budget data showed a shortfall of R325.7bn ($20bn) for the fiscal year.
That compares with a revised estimate for a gap of 5.5% of GDP which finance minister Enoch Godongwana presented on February 23 and is an improvement from the 9.9% of GDP recorded in the prior fiscal year, when the coronavirus pandemic wrought havoc on the economy.
While the Treasury cautioned that the outcome is preliminary, the better-than-expected figure means the deficit on the consolidated budget could be less than the budget projection of 5.7% of GDP.
The smaller gap comes as revenue was buoyed by higher corporate income, thanks to a rally in commodities, and VAT. Income exceeded estimates by R12.2bn, while spending undershot forecasts by R9bn, the Treasury said.
The smaller shortfall bolsters the Treasury’s chances of achieving a primary budget surplus — where revenue exceeds non-interest spending — in the 2024 fiscal year. That’ll bring its multiyear fiscal consolidation efforts to a close and allow the government to “reconsider the funding of South Africa’s priorities” in a more stable environment, it has said previously.
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