SOUTH Africa’s consolidated fiscal deficit is expected to narrow this year because of an economic rebound, although the long-term trend of higher debt remains unchanged due to COVID-19 and pre-existing spending, a Reuters poll forecast on Friday.
In a poll taken this week, 2021 economic growth was expected to rebound to 3.5% after an estimated 7.4% contraction last year, probably bolstering revenue collections and narrowing deficits for the next financial year to 9.7% of gross domestic product, to 8.5% for 2022/23 and 7.5% in 2023/24.
As in other countries, COVID-19 spending doubled the South African budget last year. The 2020/21 deficit was estimated at 13.95% of GDP in the poll with only about six weeks left.
In October, the National Treasury’s consolidated budget estimated a 15.7% deficit of GDP in the year ending March, 10.1% for next year, and 8.6% and 7.3% for the following years respectively.
Nedbank economists wrote
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