South Africa’s Budget Speech 2023: What To Expect?

South Africa’s Budget Speech 2023: What To Expect? – JOHANNESBURG, Feb 21 () – South Africa’s rand fell to its lowest level this year on Tuesday as investors await the finance minister’s budget speech due on Wednesday, which is likely to provide clues about the government’s policy Way.

At 1524 GMT, the rand was trading at 18.2875 per dollar, about 1.04% weaker than its previous close, having previously touched a 2023 low of 18.3225.

South Africa’s Budget Speech 2023: What To Expect?

South Africa's Budget Speech 2023: What To Expect?

The dollar rose about 0.13% to 104.04 against a basket of global currencies, trading near a six-week high hit on Friday.

What To Expect From The Budget Speech This Week: Eskom Debt, Tax Hikes And More

Finance Minister Enoch Godongwana will deliver his 2023 budget speech on Wednesday. As well as presenting updated forecasts for revenue, expenditure and economic growth, he is expected to present a plan for the government to take over some of the debts of the troubled state utility Eskom.

“ZAR is poised for a big move in both directions tomorrow,” ETM Analytics said in a research note.

The rand is on the defensive as one of the worst performing emerging market currencies this year and is vulnerable to any bad news, it said.

Also this week, the global watchdog, the Financial Action Task Force (FATF), which sets standards to combat money laundering and illegal financing, may add South Africa to its “grey list” at meetings in Paris, which could affect local property prices. . .

Budget Speech Highlights

Shares on the Johannesburg Stock Exchange fell, under pressure from Sibanie Stillvater Ltd ( SSVJ.J ) and Sasol Ltd ( SOLJ.J ), which both ended over 5% lower. Sibanye said he expected its annual profit to fall by as much as 51%, while Sasol’s mixed half-year results failed to impress investors.

Overall on the JSE, the broader all-share index (.JALSH) fell 1.28%, while the top-40 index (.JTOPI) fell 1.36%. Minister of Finance, Mr. Tito Mboweni, presented his last budget speech on February 24, 2021. It was stated that last year the Ministry of Finance mapped out a strategy to become a winning country, but that was before the widespread Covid-19 pandemic that destroyed lives , jobs and damaged economy.

As South Africa moves forward with its vaccination campaign, it has budgeted more than R10 billion for the purchase and delivery of vaccines over the next two years. It is an interesting observation that the finance minister did not draw any attention in his speech to the allocation of funds for further support to state entities.

South Africa's Budget Speech 2023: What To Expect?

From an economic perspective, the economy of South Africa is to recover with 3.3% of a contraction of 7.2% in 2020. In comparison, China’s forecast growth is set at 8.1%, India’s 11, 5% and sub-Saharan Africa predicts 3.2%.

The Impact Of The South African Budget Speech

Focusing on the tax aspects of the budget speech, the Treasury predicts that tax collections are expected to increase in 2020/21. year to be approximately R213 billion less than the previous year’s forecast, the largest tax deficit on record. In light of the dire situation in the South African economy, there was genuine concern in the preparation of the speech about the new tax measures that could be introduced to address the shortcomings. The Treasury, however, acknowledged that Covid-19 has led to many business closures and job losses. In the interest of supporting households, businesses and the economy, the government will not introduce any measures to increase tax revenues. A summary of the more significant tax proposals includes:

As part of the SARS renewal process, SARS will be provided with additional allocations of R3 billion to modernize its technology infrastructure and systems, expand and improve the use of data analytics and artificial intelligence capabilities and significantly participate in global compliance initiatives tax obligations. . SARS will also expand its specialist tax and customs audit and investigative skills to focus on transfer pricing abuse, tax base erosion and tax crime. SARS will also establish a dedicated unit aimed at improving the compliance of people with wealth and complex financial arrangements.

Please note that the points covered here are limited to a summary of the main budgetary highlights and proposals of the National Budget Speech 2020. There are a number of other aspects covered which we would welcome to address if you require it. In addition, the matters discussed are not yet legislated and may be subject to further changes, so they should not be used as a substitute for detailed professional advice. We are proposing the budget for 2023 in a difficult domestic and global economic environment. The global recovery is slowing.

On the domestic front, load shedding has become more persistent and long-lasting, affecting the provision of services and threatening the survival of many businesses.

Cyril Power Hi Res Stock Photography And Images

This is further exacerbated by disruptions in transport and logistics networks. Households are under pressure from rising living costs and unemployment remains stubbornly high.

In this difficult environment, we are pursuing policies that support faster growth and address financial risks. Our pursuit of greater growth remains anchored on three pillars.

First, we ensure a stable macroeconomic framework to create a favorable environment for savings, investment and growth.

South Africa's Budget Speech 2023: What To Expect?

And third, we strengthen the capacity of the state to provide quality public services, invest in infrastructure and fight against crime and corruption.

Budgeting For Growth

In this budget, we allocate additional funds for these enterprises without jeopardizing the sustainability of public finances.

The International Monetary Fund predicts that global growth will slow from an estimated 3.4 percent in 2022 to 2.9 percent in 2023.

Global economic risks remain high, including those related to the ongoing war in Ukraine, and could hinder growth if they materialize.

The reopening of China’s economy, however, could offer some respite by supporting a stronger recovery in global trade and demand.

South Korea’s Parliament Approves Conservative 2023 Budget

This is an upward revision from the projection of 1.9 percent in MTBPS for 2022, reflecting a better-than-expected result in the third quarter of 2022.

At R4.6 trillion, the size of the economy in 2022 was larger than pre-pandemic levels in real terms, evidence of a strong economic recovery even despite the lingering scars of COVID-19.

However, the medium-term growth outlook has worsened. Real GDP growth is forecast to average 1.4 percent from 2023 to 2025, compared with 1.6 percent estimated in October.

South Africa's Budget Speech 2023: What To Expect?

The fiscal consolidation strategy we adopted a few years ago has (1) curbed the growth of major consumption expenditures and (2) allowed us to use some of the higher-than-expected revenues to reduce the deficit.

Media Accreditation Advisory: 2023 Budget Speech To Parliament By Minister Of Finance Mr Enoch Godongwana

As a result, we reduce the fiscal deficit without resorting to tax increases or further cuts in social wages and infrastructure. The primary financial surplus will be achieved in the current financial year and will be maintained in the medium term.

This is a critical political position. In addition, we must consider the consolidated position, which includes debt servicing costs.

In this regard, the consolidated fiscal deficit is projected at 4.2 percent of GDP for 2022/23. year, and it will reach 3.2 percent in 2025/26. These figures include the impact of the partial assumption of Eskom’s debt, which I will discuss later. Mainly due to the Eskom debt relief, the national debt will stabilize at a higher level of 73.6 percent of GDP in 2025/26 as well. This is three years later than envisaged in the 2022 Medium-Term Budget Policy Statement.

In general, the national debt is high. The gross stock of debt is projected to increase from R4.73 trillion in 2022/23. to R5.84 trillion in 2025/26. And because the debt is high, our debt service costs are also high.

Read Finance Minister Enoch Godongwana’s Full 2023 Budget Speech Here

Debt service costs are projected to average R366.8 billion per year in the medium term, reaching R397.1 billion in 2025/26.

These are resources that could otherwise be used to address pressing social needs or to invest in our future.

These include a worsening economic outlook, further weakening of the finances of state-owned enterprises and an unaffordable agreement on public service wages. If these risks materialize, they will require us to make difficult budget compromises.

South Africa's Budget Speech 2023: What To Expect?

Accordingly, government non-interest spending will remain below revenue levels in the future, and we will continue to target debt stabilization.

Russia’s Pm Sees Budget Deficit At 2% Of Gdp In 2023

Madam Speaker, the outbreak of poverty, inequality and unemployment is as urgent today, if not more so, than it was at the dawn of our democracy almost 30 years ago. A growing economy is the key to achieving this goal. Implementing growth-enhancing reforms is a key element of our growth strategy.

Implementing growth-enhancing reforms to accelerate the implementation of these reforms, we launched Operation Vulindlela, a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms by encouraging cooperation and coordination across government, just over two years ago.

Since its inception, Operation Vulindlela has made progress in accelerating reforms in the priority areas of electricity, water, telecommunications, transport and immigration.

In the water, the bank of requests for issuing water permits was called, and new permits are now issued in 90 days.

S Africa’s Ramaphosa Skips Davos Because Of Power Crisis At Home

Later this year, we will introduce legislation to establish an infrastructure agency that will use funds in the water sector to increase investment in water resource infrastructure.

We clear the backlog of work visa applications and implement the recommendations of immigration expert reviews. Despite the gains, challenges in electricity and logistics threaten to undermine the reform agenda.

Record levels of mass shedding were recorded in 2022 – 207 days of mass shedding

South Africa's Budget Speech 2023: What To Expect?

Budget for south africa trip, budget car rental south africa, south africa budget tours, budget of south africa, budget car hire south africa, budget insurance south africa, south africa on a budget, budget car rentals south africa, speech therapy jobs south africa, south africa freedom of speech, budget safari south africa, south africa budget

Leave a Comment