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Goldman Sachs Expect Wider Fiscal Deficit Projections in Mid-Term Budget

SOUTH AFRICA
  • Goldman Sachs expect the National Treasury to present projections for somewhat wider fiscal deficits (Est: 4.7% of GDP for FY2023/24 vs 3.9% of GDP in the February budget, and at 3.5-4% in the coming years) and a modestly deteriorated debt trajectory over the forecast horizon.
  • Their view is predicated on a smaller estimated revenue shortfall than consensus and contained spending pressures.
  • On the less negative fiscal projections, Goldman Sachs think that National Treasury will succeed in avoiding having to increase the size of nominal fixed-rate domestic bond auctions. They also do not expect major announcements in other areas of fiscal policy (e.g., new revenue measures, or additional spending, including for SOEs).

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