MTBPS: Some economists believe Treasury faces difficulty of finding space for growth

As the country prepares for its first Medium-Term Budget Policy Statement (MTBPS) under a coalition government, some economists believe the National Treasury faces the difficult equation of stabilising debt, restore credibility and still finding space for growth.

Minister of Finance Enoch Godongwana is set to deliver the MTBPS in Parliament on Wednesday, a little more than three months since the country’s main budget.

The "mini budget" allows government departments to apply for adjustments to their budgets, rollovers, and request additional funds for unforeseeable and unavoidable expenditures.

It also sets out the policy framework for the budget that is presented every February and updates National Treasury's economic forecasts.

The National Treasury will present the 2025 MTBPS against the backdrop of a modest domestic recovery, and an increasingly tumultuous global landscape.

Economists at Nedbank believe the National Treasury will likely reduce its GDP growth forecast for 2025, slightly due to shrinking fixed investment and lower exports in thefirst half of the year.

They also project higher revenue growth in the current fiscal year, supported by robust increases in personal, corporate and value-added taxes (VAT).

Nedbank estimates an overshoot in gross tax revenue of R60 billion in 2025/26.

Economists at Investec agree that there will likely be a fairly substantial overrun in revenue receipts, adding the doubling in the gold price to nearly $4,000 per ounce boosted mining revenues in addition to platinum.

The National Treasury’s efforts to ensure fiscal consolidation through spending restraints and efficiency measures are also expected to take centre stage.

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