All eyes are on finance minister Pravin Gordhan today as he prepares to roll out the government budget plan for 2012.According to Fin24, Gordhan is expected to unveil a widening of the 2012 deficit, while the final budget is rumoured to exceed a trillion rand due in part to a new infrastructure roll-out.
“The question remains whether government will be able to spend this trillion rand in such a way that we get value,” Congress of the People spokesperson Nick Koornhof said on Tuesday.
Business Report noted that top economists have warned of the need to curb the growing cost of South Africa’s 1.3 million public servants, with the salary bill now topping 40 percent of spending.
It has been suggested that Gordhan will forecast a shortfall of 5.4% of gross domestic product in the year through March 2013, and will estimate a deficit of 5.2% in October.
Despite having proved himself during the past 10 years as SA’s chief taxman, South Africa may pay for Gordhan’s amiability, says Reuters Africa:
“Nobody queried his appointment on competence grounds, and all sides of the ANC saw something they liked. But with South Africa’s debt stock creeping up, analysts say he needs to put his foot down and outline a clear plan to cut the deficit if he wants to avoid a credit downgrade.”
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