SA Economy Falls Short of Government Forecasts - Dawie Roodt

Finance Minister Enoch Godongwana presented his medium-term budget in Parliament, revealing that disappointing tax revenues and rising costs to service the debt have taken a toll on government finances. Godongwana’s predictions include a slower-than-anticipated economic growth of 0.8% compared to his February budget projections, accompanied by a substantial increase of R54.7 billion in the main budget deficit. These forecasts according to Dawie Roodt, the Chief Economist at the Efficient Group, are far too optimistic. In an interview with Biznews, Roodt said he did not believe the projected growth would materialise and that several items are not included in the deficit numbers. The finance minister’s overall picture, he said, is not as rosy as the minister is portraying it. It is significantly worse. Roodt also believes that Transnet will have to be bailed out. Without it, he said, the economy is not going to function. Roodt estimates that the fiscal deficit is closer to 6.6% if Eskom’s debt is considered. Cutting the size of the state sector, he regarded it as good news and suggested the government start with VIP Protection expenses. The real picture of the economy, he said, will emerge in the main budget in February 2024. Roodt also said the picture that Mr Godongwana painted of himself as Mr Austerity does not hold water; he is Mr Expenditure. – Linda van Tilburg