Business news

2016-11-03 06:00

THE mid-term budget presentation highlighted pressure on economic growth with a revised 0.5% for 2016 and forecasts of 1.3% for 2017 and two percent for 2018.

The budget deficit for 2016/7 was revised upwards from 3.2% of GDP to 3.4%. Inflation expectations are for a reduction from current levels of 6.4% to around 5.9% by 2018.

Total government debt is expected to continue rising until 2019/20 when it should stabilise around 48% of GDP.

The government expenditure ceiling has been cut by R26 billion and an additional R43 billion will be raised via tax increases over the next two years.

Infrastructure investment of R987 billion over the next three years will focus on energy, transport and telecommunications.

Finally, an additional R17.6 billion has been set aside for post school education and training.

In other business news, the NPA has withdrawn fraud charges against Finance Minister Pravin Gordhan and two other former SARS officials.

As a result the rand gained two percent against the dollar reaching its highest level in five weeks. The bank index on the JSE reacted with its biggest daily gain since March to its highest level since 24 August.

On the back of a stronger rand, the yield on government bonds reduced to 8.7%, the lowest since 10 October. S

outh Africa also registered a “surprise” trade surplus of R6.7 billion in September further underpinning the rand.

Commodity exports were up while imports of petroleum and vegetable products dropped.

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