Gordhan to table maiden MTBPS today

Tuesday, October 27, 2009

Pretoria - Finance Minister Pravin Gordhan will today deliver his maiden Medium Term Budget Policy Statement (MTBPS) in circumstances dictated to by an unfavourable economic climate.

The minister, who took over from Trevor Manuel in May, will table the MTBPS in Parliament with President Jacob Zuma in attendance.

While Manuel enjoyed major economic growth during his tenure as minister, Gordhan will have to navigate South Africa through difficult times.

Economists predict that the National Treasury will announce a wider deficit which will come at around 7 percent from the 3.8 percent deficit documented in the national budget.

""We think it's going to be around 7 and 8 percent," said Standard Bank senior economist Dr Johan Botha.

This means the minister will have little room to maneuver in his MTBPS.

Earlier this year, South Africa entered its first recession in 17 years while the country's second quarter Gross Domestic Product, released in August, contracted by 3 percent indicating that the economy was still in a recession.

Econometrix Treasury Management economist Russell Lamberti, said he expected the minister to acknowledge the difficult fiscal conditions.

"I think we'll see a more upbeat outlook for next year, however, I suspect the National Treasury will announce larger deficits and Gordhan will remain very much at the mercy of global conditions."