South Africa: Economists and Analysts Give a Thumbs Down to Mboweni's Medium-Term Budget Statement

South Africa's Finance Minister Tito Mboweni delivers his medium-term budget policy statement on October 30, 2019.
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Economists and analysts are among the groups Finance Minister Tito Mboweni needed to woo with his Medium Term Budget Policy Statement. They were not amused.

Economic growth this year of just 0.5% and budget deficits going north of 6% of gross domestic product. Rising national debt despite cost-cutting of R50-billion annually over the next three years, for a total of R150-billion. And no real master plan to significantly boost growth and employment.

These are some of the main takeaways of Finance Minister Tito Mboweni's Medium Term Budget Policy Statement (MTBPS) delivered to Parliament on Wednesday, and the initial reaction from economists and analysts is a big thumbs down.

Mboweni did get some credit for honesty, but it is impossible to conceal the scale of South Africa's growing fiscal and economic mess.

"Overall, this MTBPS is an honest presentation," said Peter Attard Montalto, head of capital markets research at Intellidex.

"But the question lingers of why you throw the kitchen sink out now and you don't do anything about it on the expenditure side. There is clearly a strong political blockage to leap from the annual R50-billion of expenditure cuts pencilled into the R150-billion required to start to reach a primary...

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