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National Budget

Setting a course for South Africa's economy in the year ahead

Finance Minister Enoch Godongwana

 

South Africa’s National Budget in 2025: Where to from here?

After serious political pressure within the GNU that culminated in the scrapping of the 0.5% VAT increase, South Africans will turn their attention to the third iteration of the National Budget in 2025. Budget 3.0 will re-table government’s finance and spending priorities for the year against a backdrop of rising debt and economic pressure.
 

  • Finance Minister Enoch Godongwana will re-table the national budget to Parliament on 21 May
  • It will be the result of heated political debate within the GNU and key disagreements around economic policy
  • Any increase in VAT – initially proposed at 2%, then revised to 0.5% – is officially off the table
  • It’s unclear how the rest of the budget has been adjusted to make up the shortfall that would have been covered by VAT increase
  • South Africa continues to battle its rising debt obligations, which now stand at 76% of GDP, while the budget deficit grew further to 5%

 

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NOW Ep92: Budget 2025 | What to expect

Listen to our best-performing podcast

Investec experts Chief Economist Annabel Bishop, Treasury Economist Tertia Jacobs and Chief Investment Strategist Chris Holdsworth share their predictions for Budget 2025.

Watch Investec experts' media interviews

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CNBC Africa: South Africa’s tough 2025 budget plan

Investec Chief Economist Annabel Bishop unpacks the key considerations for Budget Speech.

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2025 Budget Speech expectations for VAT and job creation

In this Business Talk with Michael Avery interview, Tertia Jacobs, Investec Treasury Economist, discusses South Africa’s 2025 budget and the prospect of a R58 billion shortfall.

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Newzroom Afrika speaks to Investec treasury economist Tertia Jacobs for expert insights on Budget 2025.

Newzroom Afrika speaks to Investec treasury economist Tertia Jacobs for expert insights on Budget 2025.

Budget Speech 2024 summary

What was said at the Budget Speech 2024?

The Minister of Finance Enoch Godongwana walked a tightrope in providing financial assistance to Eskom, supporting households, and increasing investment spending.  There was very little on economic reforms, emphasising the urgency for a shift in gears from blueprint policy documents to implementation.

Some of the key points were:

  • Government taps GFERCA funds to help reduce the country’s greatest debt burden in almost 80 years.
  • Gross national debt hovers around 74% and is expected to stabilise at 75% in 2025.
  • No increase in VAT or fuel levies.
  • While there is no increase in personal income tax, a decision not to adjust tax brackets for the new financial year will push some taxpayers to a higher tax bracket.
  • The South African economy remains severely constrained, plagued by infrastructure challenges, lower commodity-driven revenue and a bloated public wage bill.

What is South Africa's budget deficit?

South Africa has a budget deficit of R258 billion to date, projected at -5% of GDP. Further slippage remains likely, but is expected to strengthen in the next two years to -4%.

 

South Africa Finance Minister Enoch Godongwana on an Investec Moneyweb banner that says "Decoding the Budget Speech"
The Moneyweb Investor

Get all the expert analysis of the 2024 Budget Speech in this special edition of The Moneyweb Investor, brought to you by Investec.

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Bloomberg TV: Kicker for Rand will be start of Fed cuts: Investec's Bishop

Investec Chief Economist Annabel Bishop discusses the South Africa budget announcement and says likely to see a coalition government this year. She also sees the main catalyst for the rand to be the start of rate cuts by the US Federal Reserve.

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WATCH: A deep dive into key insights on 2024’s budget

In this webinar recording, Moneyweb’s editor Ryk van Niekerk along with Dr David Masondo, Deputy Minister of Finance, Annabel Bishop, chief economist at Investec, and Keith Engel, CEO of the South African Institute of Tax (Sait), go beyond the numbers, offering you insights into the plans outlined by Finance Minister Enoch Godongwana.

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Disclaimer
 
The opinions and views expressed are for information purposes only and are subject to change without notice. They should not be viewed as independent research, recommendations or investment advice of any nature.