Tax revenue declines, debt grows…
Yesterday South Africa’s Finance Minister, Tito Mboweni, delivered the supplementary budget update. Minister Mboweni brought into focus the stark reality facing the South African government and the need for structural and political reform.
Some of the issues highlighted by the Minister were the large decline in tax revenue. Tax revenue is forecast to decline by over R304 billion. Other key points highlighted by the Minister
- Government borrowing will have to increase
- A far greater budget deficit is forecast
- Debt servicing is becoming increasingly unaffordable
In closing, the Minister warned that if structural reforms were not implemented timeously, South Africa could face a sovereign debt crisis. To read more on the supplementary budget update please click on the link to read the thought’s of Stanlib’s Chief Economist, Kevin Lings.