MNI South Africa Budget Preview - February 2024: Fiscal Slippage

Executive Summary:

• Finance Minister Godongwana may confirm slippage relative to MTBPS targets.
• Weaker fiscal position calls for consolidation efforts but political considerations loom.
• The Treasury has been in talks with the SARB over whether and how to tap reserves.

Click here to see our preview including a summary of sell-side views:

MNI SA Budget Preview - February 2024.pdf

Finance Minister Enoch Godongwana is facing a tough balancing act heading into his Budget speech scheduled for 12:00GMT/14:00SAST this Wednesday. The deterioration in South Africa’s fiscal position coincides with political election-year pressures, with the ruling African National Congress (ANC) on the cusp of losing its sole majority in parliament. Against this backdrop, the market expects Godongwana to acknowledge notable fiscal slippage relative to the targets outlined in his November MTBPS amid weaker mining tax receipts. A Reuters poll of economists showed that this year’s fiscal deficit may have widened to 5.3% of GDP versus 4.9% forecast in the Medium-Term Budget Policy Statement (MTBPS), while the gap in FY2024/25 may be 5.0% of GDP rather than 4.6%.