It's not a rosy fiscal picture

GROWTH: TREASURY 'HAS VERY LIMITED ROOM TO MOVE'

- Ina Opperman

The first medium-term budget policy statement (MTBPS) under the government of national unity did not paint a rosy fiscal picture, with disappointing, although modest, fiscal slippage.

Despite the hype and hope ahead of the MTBPS, Finance Minister Enoch Godongwana failed to deliver a much-improved fiscal outlook.

Oxford Economics Africa senior economist Jee-A van der Linde said the MTBPS paints a realistic picture of South Africa's financial state which continues to reflect serious risks to the fiscal outlook.

"The underwhelming MTBPS fiscal projections confirm what we already know: National Treasury has very limited fiscal room to move. Consequently, we anticipate that our baseline forecasts will largely remain unchanged.

"An encouraging takeaway is government's emphasis on pro-growth infrastructure spending and a new approach that will involve close cooperation with the private sector," said van der Linde.