Seven key points from Tito Mboweni's 'emergency' Covid-19 budget

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Finance minister Tito Mboweni laid out the full extent of the damage wrought by the Covid-19 crisis on the state’s already weak finances in his supplementary budget speech on Wednesday.

The minister confirmed expectations of a substantial rise in debt levels and a widening budget deficit.: The consolidated budget deficit is expected to reach 15.7% of GDP for the current financial year — 2020/2021 — sharply up from February’s estimate of 6.8% of GDP.: The government’s debt levels will rise to 81.8% of GDP by the end of this fiscal year. This is compared to an estimate of 65.

6% of GDP projected in February. Government aims to stabilise debt at 87.4% of GDP in 2023/24, and is aiming for a primary surplus that year.: The Treasury expects growth to contract 7.2%, the largest contraction in nearly 90 years. This is substantially worse that February’s forecast of 0.9% for 2020.: Given the hit to the economy, the Treasury expects the revenue shortfall to be more than R300bn.

 

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