The report explores:

  • The medium-term GDP growth outlook for SA
  • The growing fiscal deficit and the likelihood of a debt trap
  • The ability of the ZAR to sustain its current strength
  • The future performance of SA equity markets

Key takeaways:

  • Government expenditure is projected to reach 41.9% of GDP by the end of 2020/21.
  • Government revenue is forecast at 26.3%.
  • Budget deficit projections
    • the National Treasury forecasts a deficit of 15.7% for 2020/21; 8.6% for 2022/23.
    • the CRA forecasts a deficit of 17% for 2020/21; 10% for 2022/23.
  • The labour market absorption rate is 37.5% — a far cry from global norms of around 60% to 70%.
  • The Rand may hold its current levels or strengthen but is likely to weaken in the medium-to-long term.
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