South Africa: Cautious Optimism for Mboweni's 'Fascinating Budget'

South African Finance Minister Tito Mboweni prepares to deliver his Budget speech on February 26, 2020.
analysis

Economists and analysts are a tough crowd to please. Finance Minister Tito Mboweni's Budget on Wednesday 26 February at least struck the right notes.

Economists have given a cautious thumbs-up to the 2020/21 Budget that Tito Mboweni presented to Parliament, which is an improvement on the Medium-Term Budget Policy Statement that he delivered in October. In a nutshell, the Budget deficit is seen climbing to 6.8% of GDP in the coming fiscal year and over the next three years, there is R261-billion in planned cuts, with R160-billion seen coming off the public sector wage bill.

"This is a fascinating Budget," Peter Attard Montalto, the head of capital markets research at Intellidex, told Business Maverick.

"Tito has thrown the kitchen sink at the unions, and the public sector wage war has started. This will be a shock to realign politics and is strategically smart to maximise the chances of success."

But he also noted that the economic growth forecasts - 2020's has been pegged at 0.9% - looked optimistic, after the economy probably barely registered any growth in 2019.

"I don't think Mboweni's speech will help South Africa to escape a Moody's downgrade to junk status," said Shawn Duthie, managing director...

See What Everyone is Watching

More From: Daily Maverick

Don't Miss

AllAfrica publishes around 800 reports a day from more than 140 news organizations and over 500 other institutions and individuals, representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct.

Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica. To address comments or complaints, please Contact us.