Debt service costs have increased dramatically, with the median interest payment burden doubling to around 10% of revenue between 2011 and 2018. Image: iStock
South Africa’s main budget deficit for fiscal year 2022 was lower than the government’s estimate after being better than expected collection of revenue and spend those lower projections.
SA’s economy recorded a 5.2% deficit of gross domestic product in its main budget – which excludes total spending by the provinces, social security funds and some state entities – for the year through March 2022. , the National Treasury said in an email response to questions on Thursday. Monthly budget data showed a deficit of R325.7 billion for the fiscal year.
This compares with a revised estimate for a 5.5% GDP gap that Finance Minister Enoch Godongwana presented on February 23 and is an improvement from the 9.9% of GDP recorded in the previous fiscal year, when the Coronavirus pandemic has devastated the economy.
Although the Treasury has warned that the outcome is preliminary, the better-than-expected figure means that the consolidated budget deficit could be below the budget projection of 5.7% of GDP.
The smaller gap comes from revenue being supported by higher corporate income, thanks to a rally in commodities and value added tax. Income exceeded estimates by R12.2 billion, while spending exceeded the forecast by R9 billion, the Treasury said.
The smaller deficit strengthens the Treasury’s chances of achieving a primary budget surplus – where revenues exceed non-interest spending – in fiscal year 2024. This will conclude its multi-year fiscal consolidation efforts and allow the government to “reconsider the budget. financing of South Africa’s priorities “in a more stable environment, he said earlier.
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