South Africa's National 2013 Budget under spotlight
Finance Minister Pravin Gordhan will today address South Africa’s National budget, which is expected to focus on increasing the tax base, reducing costs and give details on how the country’s massive infrastructure projects will be funded.
The country's economists are focussing on Finance Minister as he puts the finishing touches to his 2013 Budget Speech.
It is also expected to send a signal that South Africa is a growing economy. Gordhan will table the budget before Parliament at 2pm.
The South African economy has had an uneven recovery from the 2009 recession.
“Having witnessed credit rating downgrades from all three major agencies in recent months, this year’s budget is likely to come under more scrutiny than usual in terms of balancing the needs of a cyclically weak economy burdened by important structural challenges,” said Absa in its economic commentary on Wednesday.
The South African Chamber of Commerce and Industry (Sacci) CEO, Neren Rau, said the budget must adopt a pragmatic approach towards the management of South African public finances.
“Sacci trusts that he [Finance Minister] will send a positive signal to the world that South Africa is a stable and growing economy,” said Rau.
Business hopes that the minister will provide information on how the 18 infrastructure projects will be funded.
In the last year, the Presidential Infrastructure Coordinating Commission (PICC) launched the intergovernmental forums of the 18 Strategic Infrastructure Projects, known as SIPs.
The budget is also expected to expand on the funding of the National Health Insurance (NHI), which will be rolled out from this year.
Industry also hopes that the minster will speak to the implementation of the youth employment incentive scheme.
In its commentary, Nedbank said the minister faced the difficult task of placing the country’s public finances on a sustainable path in an environment of faltering economic growth, as well as growing social spending demands.
The focus of the budget was likely to remain on spending on social and economic infrastructure.
The budget deficit for the financial year 2012/13 is expected to come in at 4.6% of Gross Domestic Product (GDP).
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