SA budget deficit seen wider than Treasury forecasts

Finance Minister Tito Mboweni delivers his maiden Budget to Parliament in Cape Town on February 20, 2019 (GCIS)
Finance Minister Tito Mboweni delivers his maiden Budget to Parliament in Cape Town on February 20, 2019 (GCIS)

South Africa’s budget deficit for the most recent fiscal year could be worse than the government had forecast.

The total shortfall for the year that ended on March 31 was R232.9bn, the Pretoria-based National Treasury said on Tuesday in its monthly budget update.

That exceeds the government’s February projections of a R224.5bngap for the main budget and R210.2bn for the consolidated budget.

The consolidated figure includes the main budget framework as well as self-financed spending by provinces, social security funds and public entities. The tax agency said on April 1 that collections didn’t meet their target.

The larger gap could point to a bigger consolidated fiscal shortfall than the 4.2% of gross domestic product the Treasury projected for 2018-19.

This may be compounded by economic growth coming in slower than what the government estimated as power cuts weigh on output.

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