Finance Minister Nhlanhla Nene. File photo: Joshua Roberts

Cape Town - South African Finance Minister Nhlanhla Nene released his medium term budget policy statement on Wednesday.

Following are highlights:

BUDGET DEFICIT

Budget deficit for 2014/15 now seen at 4.1 percent of GDP, marginally up from February forecast of 4.0 and slightly up from 3.9 percent outcome for 2013/14.

The deficit is projected to narrow to 2.5 percent by 2017/18.

GROWTH

Economic growth estimate is cut to 1.4 percent for 2014, down from 1.9 percent in 2013.

GDP is projected to rise to 2.5 percent in 2015 before reaching 3 percent in 2017.

INFLATION

Inflation is expected to average 6.3 percent in 2014, before returning to the 3-6 percent target band in the first quarter of 2015.

Inflation is seen easing to 5.9 percent in 2015 and further to 5.4 in 2017.

EXCHANGE RATE

A more competitive rand exchange rate, if sustained in real terms and not eroded by wage settlements that outpace productivity, will help exports.

Further rand depreciation would be an upside risk to the inflation forecast.

To manage currency risk, government's foreign borrowing program will remain focused on financing foreign-currency commitments arising from interest payments, and repaying maturing loans.

REVENUE

Total government revenue for 2014/15 revised to 1.1 trillion rand, or 29.5 percent of GDP, up from the 1.01 trillion rand or 29.4 percent of GDP spent in 2013/14.

SPENDING

Total government expenditure estimated at 1.25 trillion rand in 2014/15, or 33.6 percent of GDP, slightly up from the 1.15 trillion rand spent in 2013/14.

Spending is seen rising to 1.44 trillion rand over the next three years.

DEBT

Total net government debt estimated to hit 1.59 trillion rand, or 42.8 percent of GDP in 2014/15, rising to 1.99 trillion rand, or 45.4 percent of GDP, by 2016/17.

BORROWING

Net borrowing forecast at 180 billion rand in 2014/15, up from 162 billion rand in 2013/14.

Borrowing declines to 139 billion rand in 2016/17.

CURRENT ACCOUNT

Current account deficit expected to narrow to 5.6 percent of GDP in 2014 from 5.8 percent of GDP in 2013.

It is seen narrowing further to 5.4 percent in 2015 before easing to 5.0 percent of GDP in 2017. - Reuters