Expectations for upcoming budget speech

By Celeste Ganga
18 February 2008

With the much-anticipated budget speech imminent, economist at the Bureau for Economic Research, Hugo Pienaar gives his predictions on what Finance Minister Trevor Manuel will highlight.

"I think one of the main things, given the weaker macroeconomic backdrop that the budget is now likely to be tabled against, we are likely to see the treasury revise down the economic growth expectations for the next couple of years, and perhaps also the rise upwards in the inflation expectations," says Pienaar.

He adds that on the growth side, the lower growth is likely to have implications for government revenue, which may then impact the budget balance for the next three years or so.

"It's going to be interesting to see what the treasury economic projections are for growth and inflation. The other key thing in the budget is whether we are going to see some initiatives from the treasury to try and alleviate the electricity supply crisis we currently have in South Africa," says Pienaar.

Pienaar says that of particular importance is whether funds will be provided to Eskom for their capital expenditure programme.