SA 2020 national budget: Favourable budget at face value, but will government deliver on the promised wage bill cuts?

Sanisha Packirisamy, Economist at Momentum Investments

Sanisha Packirisamy, Economist at Momentum Investments has prepared a post budget flash note. Please see below the overall impressions of the 2020 budget and click here to download the full documents in PDF. Please contact me if you have trouble accessing the link. (Links to download images further below).

Initial impressions
• Smaller-than-expected budget deficit surprises positively - 0.2% narrower over the medium-term expenditure framework (MTEF) between FY20/21 and FY22/23 on average
• Contractionary budget - real expenditure growth expected to outstrip revenue growth only in the first
fiscal year - but reverses in the outer years of the MTEF on extensive expenditure cutbacks
• Relative to the October 2019 medium-term budget, consolidated expenditure was revised downwards by R155.4 billion and revenue was adjusted R131.3 billion lower between FY20/21 and