South Africa’s 2024 Budget Live: Rand (ZAR/USD), Finance Minister’s Speech

by MMC
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here are the Key takeaways Excerpt from the annual budget of South African Finance Minister Enoch Godongwana:

  • The Treasury will draw on the contingency reserve fund to the central bank for reduce debt, with 150 billion rand of the R500 billion in the account will be used directly to reduce debts. Another 100 billion will be reserved for later.
  • This will help keep the budget deficit under control. This figure is in line with November’s forecast of 4.9% of gross domestic product for the current year and is expected to shrink to 3.3% of GDP in three years. Total debt will fall than expected, at 75.3% of GDP, thanks to the plan for the use of reserves.
  • With national elections approaching in three months, the minister promised to extend monthly coronavirus allowance for two more years, until 2027, and additional spending is budgeted for health and safety, as well as fixing failing municipalities.
  • However, taxpayers have not been spared and will pay more as the Treasury decided not to adjust the supports for inflation – effectively raising taxes. There was no increase in value added tax, which had been raised as a possibility to fill a revenue shortfall.
  • Investors appreciated the speech. Government bond yields fellthe rand reinforced and the cost of insuring South Africa’s debt against default decreases. Bank stocks rose.

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