In an election year, there is naturally concern about possible populist decisions that could exacerbate the country’s already fragile fiscal position. Both domestic and international investors expect a sharp deterioration in key fiscal metrics (budget deficit and government debt). But despite investor concerns of any possible fiscal policy changes, the 2024 budget is more likely to preserve the current administration’s record of avoiding new pre-election populist policies and expenditure.

This budget is more likely to underscore the significant pro-poor spending already in place and under way, including R252bn paid annually to 27-million social grant recipients, and the intended rollout of a National Health Insurance (NHI) scheme. An estimated 61% of South Africa’s non-interest fiscal spending is already allocated to the “social wage” (various forms of social support, beyond just social grants)...

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