Key points

  • The key takeaway from the 2023 Medium-Term Budget Policy Statement (MTBPS) is that the government superficially failed to succumb to populist pressures for huge increases in expenditure in the face of revenues that are coming in lower than originally budgeted, mainly because of lower commodity prices and associated company tax paid by related mining companies.

  • In the event, the increase in the budget deficit to 4.9% of GDP from the 4.0% of GDP budgeted for in February will appease the financial markets in suggesting that the National Treasury continues to keep a relatively tight rein on government expenditure.

  • As for the rest of the MTBPS, much of it related to government intentions on tackling energy and logistical shortcomings at Eskom and Transnet, introducing procurement processes that will limit corruption and criminal activity and embarking upon infrastructural investment projects more effectively. With such intentions, government was able to circumvent actions ahead of next year’s general election that might have proved unpopular.

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