Treasury Plans to Establish Criteria for SOE Bailouts to Reduce Fiscal Burden

LOCAL NEWS

• Treasury says it plans to lay down criteria to simplify decisions on SOE bailouts and reduce their reliance on the fiscus according to FinMin Godongwana. – BusinessDay
• Union Fedusa calls for extension of the R1.50 fuel levy cut (expires month-end) after estimates for a large fuel price increase in June were released earlier this week. Union said further intervention by Govt was needed to soften the impact on consumers - IOL News
• Treasury official says it is important to return public finances to the focus, and have the kinds of firms that are contributing to the fiscus, economic development and growth. Sees debt service costs rising from R300bn to over R360bn – reaching ~R1tn over the next three years. Notes this is why its so key to start returning to fiscal balance, at least on a primary basis to a surplus, and aim to boost economic growth – CapeTalk
• Stanlib Economist says weakness in SA’s economy is keeping inflation low as firms are unable to pass price increases onto consumers. Also notes that the depressed housing markets is helping soften inflation with rental inflation at 2%. Also notes, however, that if SA does not accelerate the pace of tightening at today’s meeting that the Bank faces longer-term risks – CapeTalk

Data:

• 1400BST: SARB decision, 4.75% exp vs 5.25% prior