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SOUTH AFRICA: Goldman Sachs, JP Morgan View Fiscal Projections as Credible

SOUTH AFRICA
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  • Goldman Sachs view the fiscal projections outlined in the MTBPS as broadly credible and likely to anchor a stabilization of public debt in the next several years. Their view is that the National Treasury is being conservative on revenue and will spend less than its projections, leading the primary surplus to likely rise this year vs. their projection for it to remain flat.
  • With the 2024 MTBPS being the first fiscal policy announcement made by the new GNU, it is relevant that they would stick with fiscal policy continuity, Goldman Sachs add.
  • Similarly, JP Morgan view the MTBPS as a pragmatic further step on the economic and fiscal reform path, although with a marginally wider near-term deficit. They view the debt projections now as more realistic, although think risks are for a continued small rise in the debt ratio.
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  • Goldman Sachs view the fiscal projections outlined in the MTBPS as broadly credible and likely to anchor a stabilization of public debt in the next several years. Their view is that the National Treasury is being conservative on revenue and will spend less than its projections, leading the primary surplus to likely rise this year vs. their projection for it to remain flat.
  • With the 2024 MTBPS being the first fiscal policy announcement made by the new GNU, it is relevant that they would stick with fiscal policy continuity, Goldman Sachs add.
  • Similarly, JP Morgan view the MTBPS as a pragmatic further step on the economic and fiscal reform path, although with a marginally wider near-term deficit. They view the debt projections now as more realistic, although think risks are for a continued small rise in the debt ratio.