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Investment Solutions: Lesiba Mothata comments on #MTBPS2016

27 October 2016 | General

Finance Minister Pravin Gordhan has confirmed that South Africa remains on a prudent fiscal management path. Prior to the medium-term budget policy statement (MTBPS), there was much angst about whether material changes would be noticeable – changes to what has been the norm over the past two decades of policy formulation. The MTBPS remains consistent with what was largely expected: weaker gross domestic product (GDP) growth, declining tax revenue, consolidated fiscal expenditure and firmly-controlled debt balances.

Pragmatic budget ‘good enough’ for SA (and maybe S&P)

26 October 2016 | General

Finance Minister Pravin Gordhan delivered a pragmatic budget that is good for SA and possibly good enough for Standard & Poors for another six months. However, the bond market won’t like it.

National Treasury to demonstrate intent

25 October 2016 | General

South Africa’s Medium Term Budget Policy Statement (MTBPS), which will be read on Wednesday, 26 October 2016, is unlikely to disappoint in terms of its adherence to a fiscal path which seeks to stabilise government’s debt level close to its current level. A gross loan debt ratio of 50.5% of GDP was recorded at end June 2016. Critically, the Treasury is likely to continue mapping a path to improve the primary budget balance (revenue less non-interest spending) from a deficit of little more than 1% of GDP in 2015/16 (Main Budget framework) to a surplus of around 0.5% of GDP by 2018/19, which is good enough to stabilise the debt ratio at, say, 52% to 53% of GDP within the next three years.

Treasury will likely meet its fiscal targets in Medium-Term Budget despite pressures, says Old Mutual Investment Group

24 October 2016 | General

While the economy undeniably remains in a vulnerable position, the overall economic environment has shown signs of improvement from earlier this year.

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