said strong revenue from the commodity boom had made the treasury’s decision on the relief package easier. “It gives them some fiscal space to play with.”
In February, the national treasury projected that the consolidated budget deficit would be 14% of GDP in the 2020-21 financial year, narrowing to 6.3% by 2023-24. It said debt had increased from 65.6% to 80.3% of GDP for 2020-21 and would stabilise at 88.9% by 2025-26. A strong commodities performance also does not conceal South Africa’s structural woes, Bhatia noted. “The structural concerns are still very much there and they have to be addressed. You can’t rely on commodities to solve chronic structural issues —Difficult decisions
“I certainly don’t think the treasury assumes that … There is no doubt that it really is helping us in the current fiscal year. But I think one should be very careful to sort of assume that you can base large expenditure programmes on the expectation that this will continue,” he said.