Economists have called for today's Medium-Term Budget Policy Statement (MTBPS) to focus on strengthening the country's debt containment efforts.
The call comes as Finance Minister
The statement, colloquially known as the mini-budget, will be delivered at
"As a statement of government policy, it will also assess and explain the trade-offs and choices that must be made to ensure stable, balanced and sustainable economic growth," it said in a statement.
In its MTBPS review,
The bank's economists in the document predict that in 2023, the economy will grapple with the global slowdown and higher interest rates.
"The intense load shedding, the lingering effects of the damage caused by the KwaZulu-Natal floods, labour strikes, and the
The bank said it expects tax collections in 2022/23 to exceed the
"International commodity prices also remained relatively high over the first six months of the fiscal year, likely supporting corporate earnings and offsetting the impact of lower mining and manufacturing output,"
The public sector wage bill poses the most significant risk to the government's objective to keep non-interest recurrent spending under control, said the economists.
"We expect expenditure to increase by an annual average of 6.4% (in nominal terms) between 2022/23 and 2024/25. The public sector wage bill will rise by an average of about 5% per year over the MediumTerm Expenditure Framework (MTEF, 2022/23 to 2024/25). The limits on new hires will only help contain the wage bill after 2025/26. Bailouts for Eskom and
She said the deterioration in the performance of key SOEs had been a severe limitation on the country's growth potential.
In this regard, she anticipates the MTBPS to outline some of government's plans for Eskom's debt, with market anticipation that the state may absorb at least some.
She said: "Uncertainty still remains high for forecasts, and so risks for volatility persist, although markets have largely priced in the risks of high interest rates and recession. "More dovish tones from Central Banks would improve market outlooks with tomorrows
The impact of the good mini-budget this year on markets is likely to be overshadowed by the heavy risk aversion environment in global financial markets, as it occurs in the run-up to the November FOMC meeting, she said.
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