The consolidated budget forecast medians of 12 economists polled February 6-13 suggested the National Treasury would announce its deficit forecast at 4.55% of gross domestic product (GDP) in the fiscal year beginning in April, compared with the 4.30% it anticipated in October.

"Spending pressures are increasing due largely to rising debt-service payments given elevated global borrowing rates, social-spending programmes and ongoing support for state-owned enterprises such as debt relief for Eskom," said Dennis Shen, Senior Director at Scope Ratings.

"These factors are likely to hinder budgetary consolidation efforts and hold the government deficit at elevated levels and maintain public debt on a structurally increasing path to 80% of GDP before the end of this decade," Shen added.

Economists expect a deficit of 4.00% of GDP in the following year, 0.40 percentage points wider than the previous Treasury estimate in October.
The deficit is seen shrinking to 3.60% of GDP in the financial year 2027/28.

"We still see debt stabilisation as a credible forecast," said Elna Moolman, Head of Macroeconomic, fixed income and currency research at Standard Bank.

--Reuters--