Economic Reconstruction and Recovery Plan<\/a> stated that the country needed to provide further relief to unemployed people and extended the relief to them.<\/p>\n\u201cThere is a view that the relief has to be extended beyond January as well if we are to sustain some sort of recovery because people are taking a lot of strain,\u201d he said.<\/p>\n
\u201c\u2026Under those circumstances he will have to increase the budget deficit by probably about R20 billion over and above what was budgeted for in the supplementary budget.<\/p>\n
\u201cThat doesn\u2019t take into account the possible extra amounts that might have to be devoted to state-owned enterprises. We are unclear on that score because President Ramaphosa spoke about attracting strategic equity partners and we don\u2019t know what that will take into account – will it come off the budget or will we rely upon other funding sources,\u201d the economist questioned.<\/p>\n
While some economic analysts have argued that increasing the budget deficit could be a cause for alarm and result in a large-scale sell off of government bonds and the rand, Jammine did not agree for two reasons.<\/p>\n
The first is that the global mood around relief packages had softened enormously.<\/p>\n
\u201cI think the markets will be a little more forgiving of Minister Mboweni if he does increase the budget deficit from 14.6% GDP to something like 15 or 16%. This would mean a further increase in the public debit GDP ratio,\u201d he said.<\/p>\n
\u201cMy expectation is that of a slight increase in the budget deficit, but that will not cause excessive and undue alarm and it will not necessarily lead to rating downgrades.\u201d<\/p>\n
The government\u2019s hand in this regard had been greatly strengthened by a series of events that speak to the state finally undertaking the structural reforms that are needed to improve the growth of the economy and its ability to raise revenue.<\/p>\n
\u201cWe\u2019ve a huge number of cases being brought to courts to fight corruption and state capture. We\u2019ve also seen the government announce a big infrastructure investment programme with more details than any of the other ones,\u201d he said.<\/p>\n
Also, the state has passed laws that allow independent power producers to produce electricity and compete with Eskom.<\/p>\n
\u201cWe\u2019ve seen government announcing the launch of broadband spectrum at the end of March [and] we\u2019ve seen the government committing itself to improving the capacity of the state. All these are positive moves in the direction of structural reform,\u201d he said, adding that rating agencies observed such developments.<\/p>\n
Minister Mboweni will table the budget at 2pm. \u2013 SAnews.gov.za<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"Finance Minister Tito Mboweni faces a tough juggling act this afternoon, when he presents the 2020 Medium Term Budget Policy Statement (MTBPS) in Parliament. The MTBPS will be his second budget presentation since the tabling of the Supplementary Budget in June, which was in response to the economy-crippling COVID-19 pandemic. It also comes on the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[38678],"class_list":{"0":"post-170278","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-sanews","8":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/170278","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=170278"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/170278\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=170278"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=170278"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=170278"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}