Economy / Budget 2021

National Budget 2021 - Tito surprises South Africans

Leading up the 2021 Budget speech South Africans could be forgiven for not being too optimistic about the prospects, especially when considering the Medium-Term Budget Policy Statement shared in October 2020.

Impact on the investment markets

This was a good budget from a market perspective. The minister has perfected the art of striking a delicate balance of being both bond and equity friendly. The rand strengthened, bond yields fell across the curve and the equity market held up well. A decline in bond issuances will be positive, as it indicates that government expects its lending requirements to come down.

Budget 2021 - Commentary from Momentum Investments

Optimistic budget masks a number of key risks

Finance Minister Tito Mboweni’s budget has been received very positively, as demonstrated by the reaction from markets. SA Inc companies have rallied, the rand initially strengthened, and even the bond market is acting positively. However, while there are notes of hope, this budget also demonstrates a number of key risks, overly optimistic assumptions and potential weaknesses, pointing to an extremely challenging path ahead for the country.