South Africa targets narrowing of budget gap from next year
JOHANNESBURG – South Africa’s Treasury will outline plans in its medium-term budget policy statement in October to free up 250 billion rand ($14.4 billion) to narrow the fiscal gap from next year, the acting head of its budget office said.
The Cabinet agreed to target a primary budget surplus by 2023-24 and actively manage the nation’s finances to ensure government debt stabilizes at 87.5% of gross domestic product in three years. If it fails to do that, debt will exceed 140% of GDP by the end of the decade, the Treasury said last week.
The planned fiscal consolidation would require raising an additional 40 billion rand in tax revenue over the next four years, while cutting spending by 230 billion rand over the next two years. As a start, the Treasury wants to increase tax revenue by 20 billion rand over the first two years and cut expenditure by 90 billion rand next year, Edgar Sishi, acting head of the budget office, said in an investor call organized by FirstRand Group Ltd.’s Rand Merchant Bank, and Deutsche Bank.
Source: iol.co.za
