Budget in a nutshell

2012-10-25 14:07 - Reuters

Cape Town - Finance Minister Pravin Gordhan released his medium-term budget policy statement on Thursday. Here are the highlights:

Budget deficit

The budget deficit is projected at 4.8% of gross domestic product (GDP) for the fiscal year to March 2013, in line with economists’ expectations. The deficit is projected to fall to 3.1% by 2015/16.


Growth forecast is trimmed slightly to 2.5% for 2012, from 2.7% seen in February. GDP is projected to grow to 3% in 2013 before reaching 4.1% in 2015.


Inflation will average 5.7% in 2012, within the 3-6% target range, and is to remain target-bound over the next three years. Inflation is seen declining from 5.5% in 2013 before touching 4.9% in 2015.


Total government revenue for 2012/13 estimated at R900bn, or 27.5% of GDP.


Total government expenditure in 2012/13 seen at R1.1 trillion, or 32.5% of GDP. Spending seen at R1.1 trillion and R1.2 trillion over the following two years.


Government has reiterated plans to spend R845bn on infrastructure over the next three years. 


Total net government debt is to hit R1.16 trillion, or 32.8% of GDP, by the end of 2012/13, rising to R1.71 trillion by 2015/16, or 39.2% of GDP. 

Borrowing requirement

Net borrowing is forecast at R165bn for 2012/13, rising to R173bn the following year before easing to R162bn in 2014/15. 

Current account

The current account deficit is expected to widen to 5.9% of GDP in 2012 from 3.3% in 2011, as the trade balance deteriorates. It is expected to narrow marginally over the next three years, reaching 5.5% in 2015.

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