{"id":377415,"date":"2020-02-26T14:46:06","date_gmt":"2020-02-26T12:46:06","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=377415"},"modified":"2020-02-26T14:52:34","modified_gmt":"2020-02-26T12:52:34","slug":"south-african-budget-deficit-is-the-biggest-in-28-years","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/budget-speech\/377415\/south-african-budget-deficit-is-the-biggest-in-28-years\/","title":{"rendered":"South African budget deficit is the biggest in 28 years"},"content":{"rendered":"<p>A sharp slowdown in South Africa\u2019s economic growth and mounting demands for support from financially distressed state-owned companies will result in the highest budget deficit in a generation.<\/p>\n<p>The shortfall as a percentage of gross domestic product is forecast to expand to 6.8% in the fiscal year through February 2021, according to the National Treasury\u2019s annual Budget Review.<\/p>\n<p>The figure is the highest since 1992-93, when the gap was 7.2%, and compares with a forecast of 6.5% in October, Treasury data shows.<\/p>\n<p>Key Points:<\/p>\n<ul>\n<li>The Treasury ruled out achieving a proposal set out in its October medium-term budget of achieving a main budget primary balance by 2022-23. \u201cThis target is now out of reach, and debt is not expected to stabilize over the medium-term,\u201d the Treasury said.<\/li>\n<li>Gross government debt is projected to increase to 71.6% of GDP by 2022-23, compared with 71.3% forecast in October.<\/li>\n<li>GDP is forecast to expand 0.9% this year, 1.3% in 2021 and 1.6% in the following year. The projections are all lower than those envisaged in October, when they were 1.2%, 1.6% and 1.7% respectively. The economy probably expanded 0.3% last year, the Treasury said.<\/li>\n<li>With slower growth, revenue estimates have been reined in. The government expects to raise R1.58 trillion ($103 billion) of income in the coming year, R1.68 trillion in 2021-22 and R1.79 trillion in 2022-23. Those estimates are all down by between 2.1% and 2.7% from October.<\/li>\n<\/ul>\n<p>\u201cTo contain the budget deficit and move towards debt stabilisation, the 2020 budget proposes a significant reduction in government expenditure growth, mainly as a result of lower growth in the public-service wage bill,\u201d the Treasury said.<\/p>\n<p>Reductions in compensation are envisaged at R37.8 billion in 2020-21, R54.9 billion in 2021-22 and R67.5 billion in 2022-23.<\/p>\n<p>Total spending is forecast at R1.95 trillion in 2020-21, down 1.2% from the October estimate, and 2.04 trillion and R2.14 trillion in the subsequent two years, representing declines of 2.7% and 3.3% respectively from four months ago.<\/p>\n<hr \/>\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/budget-speech\/376277\/mbowenis-budget-unlikely-to-stop-south-africas-march-to-junk\/\" target=\"_blank\" rel=\"noopener noreferrer\">Mboweni\u2019s budget unlikely to stop South Africa\u2019s march to junk<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A sharp slowdown in South Africa\u2019s economic growth and mounting demands for support from financially distressed state-owned companies will result in the highest budget deficit in a generation.<\/p>\n","protected":false},"author":59,"featured_media":349907,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13716],"tags":[26],"class_list":["post-377415","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-budget-speech","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/377415","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=377415"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/377415\/revisions"}],"predecessor-version":[{"id":377429,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/377415\/revisions\/377429"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/349907"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=377415"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=377415"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=377415"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}