That the minister acknowledged South Africa’s challenges but missed the opportunity to ignite confidence was echoed by the performance in the rand.
The rand weakened from about R17.59 to as high as R17.76 as the minister spoke Picture: Karen Sandison/ Independent Newspapers.The first Medium-Term Budget Policy Statement since the Government of National Unity failed to inspire confidence among investors, with the rand dropping as Finance Minister Enoch Godongwana tabled a speech that warned of slower economic growth, higher debt, and fewer revenue collections.
Godongwana, seen as a pair-of-safe hands when he kept his position in the finance chair, said that “there is a new light that is shining down on our country and on our economy”. Marx said that the shortfall in revenue was not a surprise, nor was interest expenses being higher than anticipated and that the main budget deficit would be larger than what was projected in the February Budget.
Investec chief economist, Annabel Bishop, said MTBPS saw a deterioration in the fiscal metrics against expectations, which caused the rand to weaken, while “the deterioration in state finances projections extended to government’s debt-to-GDP ratio too”.
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