Expert insight: Youth employment & personal finance experts share MTBPS predictions

The youth employment expert: Nkosinathi Mahlangu is Head of Youth Employment at the Momentum Group.

In terms of MTBPS predictions, Nkosinathi anticipates:

Overall
This year's MTBPS is anticipated to once again be a balancing act for Treasury, with the Minister expected to reiterate government’s focus on fiscal consolidation and strictly managing expenditure - no huge departure from the mini-budgets of previous years. However, this time around, it will also act as 'proof of concept' for the Government of National Unity (GNU); an audition where the newly-formed government needs to demonstrate that it has the finger on the pulse of SA's economic pain points, which includes unemployment.

Social Relief of Distress (SRD) grant
Unemployment remains sky-high and the SRD grant is an important political pillar for the ANC, so we can expect the social relief grant to continue for the foreseeable future.

Job creation
Government typically speaks about various infrastructure programmes and manufacturing to boost job creation. This year, we expect agriculture to have increased focus, given Minister Steenhuisen's recent announcements around his department's moves to support small-scale farmers, helping them grow.

Red tape
I am hoping that this year's mini-budget outlines measures to reduce the red tape for SMMEs, increasing access to funding and small business support. Given the recent furor around spaza shops owned by foreign nationals, we might also see the informal economy get a mention.

The personal finance guru: Jurgen Eckmann is a Wealth Manager at Consult by Momentum.

In terms of MTBPS predictions, Jurgen anticipates:

Budget deficit
The National Treasury projects a budget deficit of 4.9% of GDP for 2023/2024, which is lower than the 5.3% median forecast from local economists. I hope to see this come in closer to the 4.5% mark to show improvement in this area.

Public debt
The debt is expected to peak at 77.7% of GDP in 2025/2026, which is higher than the 73.6% target set in Budget 2023. I hope to see this figure decline steadily in the years to come as the government employs new fiscal activities to stimulate economic growth.

Social Relief of Distress (SRD) grant
The R350 SRD grant will continue until March 2025. The government will also review the social grant system to create a new social security policy and funding model. I want to get more clarity on the sustainability of funding and how this can be reorganised to stimulate economic growth at the same time as providing necessities.

Debt-service costs
Debt-service costs as a share of revenue are expected to increase from 20.7% in 2023/2024 to 22.1% in 2026/2027. I hope to see the tailwind of a lower interest rate environment reducing this burden on the economy over the next 2 years.

Geopolitical tensions
Rising geopolitical tensions could worsen the situation, especially if oil prices increase.

Global demand
Lower global demand could weaken commodity prices and negatively impact government revenues.

Two-pot - economic stimulus?
I would also like to see mention of how two-pot savings withdrawals have filtered into the economy to bolster growth and how this injection in tax revenue will be directed in the MTBPS.