Key takeaways from the MTBPS

According to Andre Cilliers, Currency Strategist, TreasuryONE, the MTBPS confirmed that fiscal consolidation remains a priority for the government, although tax revenues were weaker than expected.

“The National Treasury used conservative growth projections, keeping debt-to-GDP and budget deficit forecasts realistic,” Cilliers said.

“Additionally, the government’s funding strategy will involve tapping offshore markets, which should alleviate pressure on the local bond market.”

Cilliers said that Godongwana’s MTBPS signalled an end to bailouts for state-owned enterprises while stressing a move towards capital investment and private sector inclusion in infrastructure projects.

The MTBPS stressed the need to focus on macroeconomic stability, supporting and stimulating economic growth and implementing structural reforms, according to Andrew Golding, chief executive, Pam Golding Property group.

Golding said that the MTBPS which offered encouraging comments regarding public-private collaboration is expected to help create stability and boost sentiment towards South Africa from both an international as well as local market perspective.

Next steps: February Budget

Cilliers said that investors expect further reform announcements in February’s budget, especially if government intends to implement structural changes.

“Given the constrained fiscal environment, reforms around SOE efficiency, infrastructure upgrades, and municipal sustainability will be crucial,” Cilliers said.

IOL Business