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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.
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.
Image: Bloomberg

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.

More stories like this are available on bloomberg.com

Bloomberg

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