Johannesburg - Finance Minister Pravin Gordhan's medium-term budget policy statement, delivered earlier on Thursday in Parliament, was met with cautious approval by business commentators.
The SA Chamber of Commerce and Industry (Sacci) said it was pleased with the budget adjustments.
"The main message is a commitment to the stabilisation of government spending that will lessen the overall tax burden on the country," said CEO Neren Rau.
"The commitment to reducing the fiscal deficit and government debt indicates greater emphasis on fiscal sustainability, that could have a positive influence on our credit ratings and foreign investor perceptions."
Certainty on fiscal sustainability would improve South Africa's credit rating.
Sacci would have liked a direct acknowledgement of the impact of the credit rating downgrades on investor confidence and foreign funding.
By upwardly revising the budget deficit over the medium term, Gordhan had partly reinforced rating agency concerns, said Rau.
Stabilised government spending would lead to lower taxation.
It would also foster a culture of sound governance across the public sector.
Increasing transfers to municipalities, together with expenditure discipline, would help to address service delivery failures.
Sacci wondered whether the increased transfers would be sufficient, considering municipalities' financial constraints.
It would have liked to have seen more prudence applied to the public sector wage bill, which exceeded forecasts.
It also wanted detailed plans to reduce the cost of doing business.
"The crucial problem stifling the growth of the small business sector is the regulatory burden," Rau said.
Sacci wanted to see more detail regarding government plans to reduce the cost of doing business.
It also wanted to hear more about private sector participation in infrastructure development, and initiatives to tackle youth unemployment.
Standard Chartered economist Razia Khan said the National Treasury had played cautiously in announcing its budget adjustments, but a positive surprise was likely.
"We still expect that the likelihood of a positive surprise on the deficit is great," she said.
"It is not clear that the current slowdown will impact tax revenues."
This was despite official growth forecasts revised downwards to 2.5 percent for 2012, and deteriorating expectations for the budget deficit.
The deficit for the financial year 2013 was expected to widen to -4.8%, from -4.6% previously forecast, and to -4.5% in the 2014 financial year (from -4.0% previously).
For the financial year 2015, a deficit of -3.7% was expected, from -3% previously.
The Treasury might be overly cautious in its projections, said Khan.
It expected to receive R10.7bn in extraordinary receipts, which would make some difference to the deficit.
Continued efforts to expand the tax base would pay off, even in the midst of a slowdown.
News of the adjustments had been well-received by the market.
Bond yields had declined and the rand had strengthened.
"An ongoing concern, of course, is the widening of the current account deficit," she said.
Treasury forecasts had been revised to reflect further deterioration, with the deficit now seen at 5.7% for the current financial year.
This was expected to narrow to 4.9% in the 2015 financial year.
These revisions might not go far enough.
"It is still unclear how South Africa will regain its external competitiveness, rapidly enough," Khan said.
Metropolitan Health CEO Blum Khan said South Africa was still resilient in a tough world, although several problems were highlighted.
The largest share of the spending went to the government salary bill, which concerned Blum.
"This obviously limits our ability to spend money on other pressing issues," he said, such as infrastructure and economic development.
Further delays in the National Health Insurance plan were likely as economic pressure became more severe.
Consolidated government expenditure was projected to grow by an average of 8.2% until 2016. During this period, real GDP growth would remain between 2.5% and 4.1%, according to Gordhan.
"Given the state of the world economy, it is more likely that we will see muted growth," Blum said.
This would need careful review of expenditure unless the economy strongly picked up.
"The wild card remains the impact of a future weak rand on inflation and the personal debt burden South Africans are carrying," he said.