South African Finance Minister Pravin Gordhan unveiled his 2011/12 budget on Wednesday. Following are highlights:
- Budget deficit projected at 5.3 percent of gross domestic product in the fiscal year to March 2012, sharply higher than the Treasury's own previous estimate and economists' expectations before the announcement. The deficit should fall to 3.8 percent by 2013/14 as the economy grows and tax revenues recover, the Treasury said.
- The government trimmed its 2011 GDP growth forecast to 3.4 percent from 3.5 percent expected last October, but it maintained its 2012 and 2013 targets at 4.1 percent and 4.4 percent.
- Headline Consumer Price Index inflation is forecast to remain within the target range of 3 to 6 percent, edging towards the upper side of the band by 2013. Inflation is projected to average 4.9 percent this year, and rise to 5.2 percent in 2012 and 5.5 percent in 2013, as the economy strengthens.
- The current account deficit narrowed to an estimated 3.2 percent of GDP in 2010, down from 4.1 percent in 2009, but it is expected to widen back to 4.2 percent in 2011 before rising to 5 percent in 2013.
- Net government debt to hit 999 billion rand ($140 billion) by the end of the 2011/12 fiscal year and rise to 1.4 trillion rand, or 39.3 percent of GDP, by 2013/14.
- Total government revenue for 2011/12 forecast at 824 billion rand, or 28.3 pct of GDP. That should rise a fraction to 28.4 percent and 28.8 percent in the following two years.
- Total government expenditure seen at 33.6 percent of GDP, in line with the previous year's budget. In 2012/13, it is forecast to drop to 33.2 percent, and 32.6 percent in the year after that.
- Public sector spending on infrastructure expected to average 8.4 percent of GDP over the next three years, totalling 808 billion rand.
- Revised tax revenue for 2010/11 is 672 billion rand, 12.3 percent higher than the previous year; it is seen rising to 741 billion rand in 2011/12 before reaching 927 billion in 2013/14.
- Government proposes spending 150 billion rand over three years as it tries to create 5 million jobs by 2020. - Reuters