Publications
Partners
Johannesburg - Finance Minister Pravin Gordhan is expected
to adjust South Africa’s economic growth estimates downwards and deliberate on
the budget deficit, economists said at the weekend.
The downward revision is an indication that global economic woes, including those of the eurozone, are weighing on SA's growth prospects.
The market is likely to also pay close attention to SA's
borrowing needs as revenue declines.
Dawie Roodt, a senior economist at Efficient Group, said current gloomy global economic prospects would force the minister to adjust growth estimates as the local economy has slowed down after a robust jolt in the first quarter of this year.
Statistics South Africa data show that gross
domestic product (GDP) for the second quarter of 2011 rose by an
annualised rate of 1.3%, compared with a 4.5% increase during the first
quarter.
“Because the world economic recovery has come under pressure
as the Greek sovereign debt crisis took its toll, among other things, I think
the minister is going to talk at length about the eurozone crisis,” Roodt said.
Gordhan warned this week that South Africa has already been affected by the eurozone crisis.
Mike Schüssler, a director at Economists.co.za, said Gordhan
would also talk about the budget deficit because this has become a concern to
many in the light of the eurozone sovereign debt crisis.
Schüssler said he is of the view that SA's budget deficit is growing at an alarming rate but is within acceptable limits at this stage.
Another item that would be keenly watched is the National
Health Insurance (NHI) and whether extra taxes would be imposed to fund it.
The NHI aims to give all South Africans and legal long-term
residents access to essential healthcare regardless of income, and is to
be implemented in stages over the next 14 years.
It will be funded through the fiscus - the tax that
everybody contributes - and secondly, through mandatory contributions from
individuals and employers.
