Going through the medium-term budget and listening to Finance Minister Pravin Gordhan's rather "presidential" address, it became clear that the closest thing to a silver bullet for our economic troubles is to somehow find a way to improve economic growth. It was made abundantly clear that weak GDP growth, revised down to 0.5% from 0.9% in the February budget speech, has led to lower tax revenue, which runs the risk of increasing the fiscal deficit, unless you reduce expenditure more aggressively - otherwise you will be forced to fund the shortfall through borrowing. And that, in turn, increases the cost of the borrowing. In the famous words uttered by former finance minister Nhlanhla Nene two months before he was fired, in the very same speech last year, "without economic growth, revenue will not increase. Without revenue growth, expenditure cannot increase". He repeated this four times during the speech. Minister Des van Rooyen didn't get a chance to say anything, but, not to be ou...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.