Mboweni to stick close to Feb budget

New finance minister Tito Mboweni will stick closely next week to previous budget forecasts for the coming two fiscal years, with only slight slippages due to poor revenues, economists predicted in a Reuters poll.

The forecast for this fiscal year’s deficit is 0.2 percentage point bigger at 3.8% of GDP, the poll showed. Mboweni will tweak next year’s estimate in his budget review on October 24 but reiterate February’s call for a fall to 3.5% in 2020/21, the economists predicted.

This time last year, then-Treasury chief Malusi Gigaba painted a shocking picture of a R50.8 billion shortfall in revenues for the year ending last March.

He was more hopeful in his February statement, although official data showed the economy unexpectedly slipped into recession earlier this year.

“There is very likely to be some slippage amid weaker growth, R30 billion more for the public sector wage bill. The question is how significant the slippage will be,” said Hugo Pienaar, economist at the Bureau for Economic Research.

Not much has improved since SA inaugurated President Cyril Ramaphosa in February. Two finance ministers have left and economic growth is now forecast at 0.8% this year, down from 1.4% expected when he took office.

The latest forecast is unchanged from a September poll.

To plug revenue shortfalls, VAT was raised by Gigaba in February’s budget to 15%, a move that has put consumers under significant financial strain.

“With a new finance minister (Mboweni) for the second time this year, October’s mini-Budget will be keenly watched, but will likely deliver a similar path to the Budget released at the start of the year,” said Annabel Bishop, chief economist at Investec.

Economists said the budget review on Wednesday was likely to have been signed off before Mboweni and will probably expand on Ramaphosa’s reform plans, including re-prioritising R50 billion of public spending to boost growth and create jobs.

Consumer inflation is predicted to average 4.7% this year and 5.4% next. – Reuters

Moneyweb

The SA Property Owner’s Association (Sapoa) has decried major delays in building and town planning approvals in the City of Joburg (CoJ), saying it is putting billions of rand of investment at risk.

Sapoa CEO Neil Gopal told Moneyweb the issue had become a huge concern not only for property developers, but also the city’s town planning fraternity.

“We have received numerous complaints that the CoJ’s planning office has come to a virtual halt. One developer said he has lost about R100 million due to planning delays,” Gopal said.

Sapoa has seen a considerable decline in planning approvals. “We are talking billions of rands here. It is not just a case of the

There is very likely to be some slippage amid weaker growth.

Hugo Pienaar Economist at the Bureau for Economic Research