Publication description

  1. Treasury economic growth forecasts have been revised to 0.5% in 2019 (down from 1.5% expected in February). Treasury expects growth to rise to 1.7% in 2022. Important to note here that Treasury forecasts have historically been short by a margin of 50%. CRA research therefore anticipates between 0% and 0.5% growth for 2019.
  2. The fiscal situation remains bleak. The consolidated budget deficit is now projected at 5.9% of GDP in 2019. National debt exceeded R3tn, and is anticipated to rise to R4.5tn (~50%) over the next three years. Debt to GDP could exceed 70% by 2022/23 in the absence of meaningful policy reform. On its current path, SA is headed for a sovereign debt trap.
  3. Eskom remains a systemic risk to the SA economy, with R230bn committed by government over the next 10 years. Although the Minister insisted that Eskom should be "run like a business", the utility will be unable to meet its current debt commitments without continued government support.