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Pretoria - South Africa’s population is getting bigger and older and this is going to put pressure on the fiscus in future, said Treasury on Wednesday.
In its medium-term budget policy statement, Treasury said South Africa's growing and ageing population will have a significant impact on the cost of social programmes like grants in future.
“Population estimates have changed significantly over the past few years,” said Treasury in the statement.
“The 2011 Census estimated the 2012 population at 51.8 million. The NDP projected the population would be between 58.2 million and 61.5 million by 2030.
“However, the latest actuarial projections put the population at 65 million in 2030. In general, a larger and older population will place greater pressure on social spending,” said Treasury.
Treasury said South Africa’s population needs to grow faster to support its citizens better.
On Wednesday, Treasury downgraded South Africa’s growth forecast for 2016 from 0.9% to 0.5%. Growth is expected to accelerate to 2.2% in 2019, but the country still needs to grow more quickly, said Treasury.
READ: Treasury cuts economic growth estimate to 0.5%
Treasury further regards South Africa’s growing and older population as a lon- term risk.
“Ensuring fiscal sustainability while implementing new initiatives currently on government’s agenda would require a significant acceleration of economic growth to boost tax revenue; policy measures to increase the structural levels of taxation, with rates raised across all major tax types; and/or shifting resources from other priorities,” said Treasury.
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