SA’s economic outlook remains weak: Godongwana
Finance Minister Enoch Godongwana has honed in on cost-cutting as government spending surges.
Tabling his mini-budget in Parliament on Wednesday afternoon, he said this needed to be done urgently as the country's economic outlook remains weak.
"The economic outlook over the medium term remains weak, reflecting the cumulative effect of power cuts, the poor performance of the logistics sector, high inflation, rising borrowing costs, and a weaker global environment. The International Monetary Fund forecasts global growth to slow from 3.5 per cent in 2022 to 3 per cent in 2023 and 2.9 per cent in 2024."
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He said domestically, 0.8 per cent growth in real GDP is forecast for 2023.
"This is 0.1 percentage points lower than the growth projection at the time of the 2023 Budget. Growth is projected to average 1.4 per cent from 2024 to 2026. These growth rates are not sufficient to achieve our desired levels of development."
Godongwana said the rising annual budget deficits have reached levels where the government will need to borrow an average of over half-trillion rand over the medium term.
"As a result, gross debt rises from R4.8 trillion in 2023/24 to R5.2 trillion in the next financial year. By 2025/26, it will exceed the R6 trillion mark. We now expect gross government debt to reach 77 per cent of GDP by 2025/26. This is higher than the level we forecast in February."
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