In the News: Medium Term Budget 2014

Highlights of medium term budget presented in parliament by Finance Minister Nhlanhla Nene on October 22, 2014…

GDP (or economic growth) is expected to slow to 1.4% this year and to be 2.5% in 2015; 2.8% in 2016 and 3% in 2017.

The current account deficit is expected to narrow to 5.6% of GDP in 2014 from 5.8% of GDP in 2013.   It is expected to narrow further to 5.4% in 2015 and again reduce to 5.0% of GDP in 2017.

Tax increases on the cards for the 2015/2016 tax year.

Inflation is expected to average 6.3% in 2014 and is expected to be 5.9% in 2015; 5.6% in 2016 and 5.4% in 2017.   Further rand depreciation would be an upside risk to the inflation forecast.

Cost cutting measures by government to include:  cutting planned expenditure on travel, conference venues and catering across government departments;  the withdrawal of funding for government posts that have been vacant for some time and government consulting services to be capped.