Gordhan sticks with budget forecasts

2012-10-25 14:53 - Sapa

Parliament - Government spending over the next two years will stick to the medium-term forecasts announced in February, Finance Minister Pravin Gordhan said on Thursday.

In his 2012 medium-term budget policy statement tabled in parliament, he said the third year (2015/16) would see some moderate growth.

According to the document, government spending is set to rise from the revised estimate of R1.057 trillion in 2012/13 to R1.339 trillion in 2015/16, while revenue is expected to grow from R900.6bn to R1.205 trillion over the same period.

This makes for a deficit of 4.8% in 2012/13, but declining to 3.1% in 2015/16.

Real gross domestic product (GDP) growth for 2012 is now expected to be 2.5% rising to 4.1% in 2015, and GDP at current prices R3.202 trillion in 2012, and R4.264 trillion in 2015.

The consumer price index is expected to be 5.7% for 2012, dropping to 4.9% in 2015, and the current account balance (as a percentage of GDP) -5.9% for 2012, slowly dropping to -5.5% in 2015.

In terms of consolidated government spending, the health and social protection sector will continue to receive the lion's share over the medium-term expenditure framework period - growing from a revised estimate of R246.2bn in 2012/13 to R306.4bn in 2015/16, an annual average increase of 7.6%.

The education sector follows with R220bn in 2012/13, rising to about R269bn in the outer year, an average of 6.9% a year.

Spending on local government, housing and community services is projected to rise from the revised 2012/13 estimate of R121.7bn, to R157.5bn in 2015/16, an average of 9% a year.

The allocation for public order and safety goes from R99.7bn to R119.7bn over the same period, averaging 6.3% a year.

Spending on transport, energy and communication will increase from R83.5bn to R105.1bn, an average of 7.9% a year.

General and public services spending follows, growing from R53.3bn in 2012/13 to R62.1bn in 2015/16, averaging 5.2% a year.

Economic services goes from R44.6bn in 2012/13 to R52.6bn in the outer year, 5.6% on average a year.

The employment and social security sector is allocated a revised estimate of R43bn in 2012/13 and R55.9bn in 2015/16, rising by 9.1% on average each year.

The defence and state security sector sees growth from R42bn to R50.2bn over the same period, 6.1% on average annually.

The smallest slice goes to science and technology, a revised estimate of R14.1bn going up to R16bn in 2015/16, 4.1% on average a year.

Provision is also made for a contingency reserve of R4bn in 2013/14, R10bn in 2014/15, and R30bn in 2015/16.

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