This year’s budget speech comes at a time when the country is grappling with a wide variety of issues that have had a direct impact on the country’s economy. Namely, the currently ongoing stage 6 load-shedding in addition to floods have affected five provinces throughout the country.
Finance Minister, Enoch Godongwana is scheduled to table his much anticipated annual budget speech on Wednesday 23 July 2023.
However, experts are not as optimistic when some of the country's biggest ongoing issues remain largely unaddressed, particularly regarding Eskom and the Electricity Minister that is due to be appointed to address the power utility's ongoing problems
Economist Joseph Busha says that the current number of Sassa social grant recipients, which currently sits at approximately 25 million, will likely exert pressure on the government’s fiscus, and even more so on the Minister’s set tax collection target of R1.68 trillion.
"We know we need to see how that is going to pan out given the fact that you know the loss of pressures in terms of Revenue collection given load shedding, companies might collect less. If you collect less it means less Revenue that goes to the fiscus. That means less spending, so the balancing Act is going to be a little bit tougher." said Busha
The economist also expects the extension of the Sassa SRD to have an impact on the government’s revenue in addition to the upcoming public sector wage strike.
High inflation is also a factor to consider, as it is likely to impact households, due to a weakening rand and the rising cost of living. Inflation remains relatively high at 6.9% despite a recent decrease from 7.2%.
Busha goes on to say that the only positive outcome in the lead-up to the speech would be if the Ministry meets its revenue. This would have the effect of the South African Reserve Bank keeping the interest rates low.
