South Africa - 01

South Africa: Politics Overshadows Gordhan’s Budget

On 26 October Minister of Finance Pravin Gordhan presented his MTBPS, which sets out the budget framework for the next three years. General market sentiment toward the MTBPS appears to be largely positive in the context of weak economic growth projections and limited fiscal space. However, it is uncertain whether Gordhan’s proposed tax increases and spending cuts will be sufficient to ward off a rating agency downgrade in December. This is largely due to the ongoing uncertainties that surround Gordhan’s political future, especially amid growing evidence that trumped-up criminal charges are being used as an attempt to remove him from office, or at least limit his influence.

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