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SA budget deficit unchanged at 4%

Johannesburg - South Africa Finance Minister Pravin Gordhan on Tuesday kept his budget deficit estimate for the 2013/14 fiscal year ended March 31 at 4 percent of gross domestic product, unchanged from his February projection.

Gordhan said drivers of revenue included the mining and manufacturing sectors, which grew at double-digit rates in the fourth quarter of 2013 after poor performances earlier in the year.

Pravin Gordhan, Minister of Finance. Photo: Matthew Jordaan. Credit: Independent Newspapers

Revenue totalled 899.7 billion rand ($86 billion), while expenditure is anticipated at just below 1.1 trillion rand.

In his February budget, Gordhan predicted another 4 percent budget shortfall for the 2014/15 year, which started on Tuesday.

Gordhan trimmed the deficit forecasts for the upcoming financial year in his February budget, vowing to keep spending in check even as the country heads for general elections in a month's time.

“The 2014 budget projects that spending will be well contained over the medium term, and government remains committed to an expenditure ceiling. Given this commitment, the buoyant revenue will contribute to our efforts at fiscal consolidation,” he said in a statement.

He said revenue collection should rise as exporters benefited from a weaker rand, which shed more than 20 percent of its value against the dollar last year and started 2014 on the back foot.

The currency has however recouped some of this year's losses amid a global uptick in risk appetite.

Fitch ratings agency, which rates South Africa's creditworthiness at BBB with a stable outlook, said the budget showed Gordhan's fiscal consolidation plans were on track despite weak economic growth and the upcoming elections. - Reuters

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