South Africa: Mini Budget Highlights - the MTBPS in a Box

26 October 2022
Daily Maverick (Johannesburg)
analysis By Ed Stoddard

Here are some of the highlights of the 2022 Medium-Term Budget Policy Statement presented on Wednesday by Finance Minister Enoch Godongwana.

Strategy/goals: The 2022 MTBPS aims to reduce fiscal risks in the short term, narrow the budget deficit and stabilise debt. It also proposes measures to enhance economic growth and restore funding for infrastructure and service delivery programmes.

Debt: Gross loan debt is seen stabilising at 71.4% of GDP in 2022/23 - two years earlier and at a lower level than projected in the 2022 Budget Review. Net loan debt - which is gross loan debt less cash balances - is forecast to stabilise at 69% of GDP in 2024/25. Gross loan debt is expected to increase from R4.75-trillion in 2022/23 to R5.61-trillion in 2025/26.

Budget deficits/surplus: The consolidated budget deficit is seen narrowing from 4.9% of GDP in 2022/23 to 3.2% of GDP in 2025/26. Along the way, in 2023/24, a primary budget surplus of 0.7% of GDP is expected, which would be the first such surplus in 15 years. There will still be a budget deficit, but revenue in this scenario would exceed non-interest spending, an accounting sleight of hand.

Borrowing: Long-term borrowing in the domestic bond market...

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