SOUTH Africa’s major economic event this week is the Medium Term Budget Policy Statement (MTBPS) on Thursday (11 November), which will provide an update of the projected fiscal policy direction over the next three fiscal years, say economists at the Bureau for Economic Research (BER).
“In recent years, the MTBPS has come as a shock to financial markets, only for the main budget the following February to ease the concerns,” the group said in a research note.
“This trend could be turned on its head this time as the MTBPS will show a much-improved short-term fiscal situation, with a much smaller budget deficit, potentially close to 5% of GDP versus 9% expected in February, for the 2021/22 fiscal year and a significantly lower starting point for public debt – around 71% of GDP versus roughly 80% before.”
However, the MTBPS could postpone critical expenditure decisions, including on possible permanent income
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