1 / 16

2014 Pre-Budget Briefing

2014 Pre-Budget Briefing. Parliamentary Budget Office | 19 th February 2014. Outline. Objectives Global Economic Review and Outlook SA Economic Review and Outlook Fiscal Review and Outlook Linking the Budget with the NDP Risks Issues for Consideration. Objectives.

djerry
Télécharger la présentation

2014 Pre-Budget Briefing

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. 2014 Pre-Budget Briefing Parliamentary Budget Office | 19th February 2014

  2. Outline • Objectives • Global Economic Review and Outlook • SA Economic Review and Outlook • Fiscal Review and Outlook • Linking the Budget with the NDP • Risks • Issues for Consideration

  3. Objectives • To provide members with a review of the global and domestic economic trends that influence policy and budget decisions. • To track key policy developments since 1994. • To highlight key economic, fiscal and policy trends, with implications for the new budget. • To highlight matters for consideration.

  4. Global Economic Review and Outlook Source: IMF 2013

  5. South African Economic Review and Outlook NIPF NGP PICC NDP RDP GEAR strategy to stabilise economy Budget surplus ASGISA Effects of financial crisis

  6. Fiscal Review and Outlook Consolidation Expansion Invest for growth Consolidation 1994: RDP increase in the delivery of social goods 1996: GEAR strategy to stimulate growth • Between 1996 and 2000: Reshape intergovernmental fiscal environment and introduce PFMA 2001: Micro Economic Reform Strategy 2010: New Growth Path Declining deficit Increased public spending High spending accumulated debt 2012: IPAP 2013: NDP

  7. Spending Trends

  8. Exchange Rate

  9. Inflation Source: Stats SA

  10. Linking the 2013 Budget with the NDP

  11. Global Risks • Slower global recovery; • Tapering-down of QE by the US; • Low demand for SA exports; and • Depressed demand for commodities.

  12. Domestic Risks • Policy uncertainty and discontinuity; • Labour unrest; • Service delivery protests; • Infrastructure bottlenecks (energy, transport; communications, water); • Infrastructure slow spending; • Inflation; • Debt; • Interest rate hikes; • Exchange rate volatility.

  13. Issues for Consideration Fiscal Policy and Budget Decisions • The alignment of budget programme structures with plans is ideal to monitor budget performance in respect of outcomes/goals/impact. Are there processes in place to review budget programme structures? • Is the budget reflective of policy priorities i.e. NDP, IPAP, NGP, fiscal policy objectives? • Is the country's budget policy-led? Does it adapt quickly to policy changes? • Will social safety allocations continue to expand in the face of poorer economic performance? • Will the significant infrastructure allocations be maintained if growth slows further? • Which programmes have been sacrificed to meet the budget deficit targets?

  14. Issues for Consideration Fiscal Policy and Budget Decisions • Will budget decisions attract foreign investors? • Are measures in place to curb the growth of, and even reduce, the public wage bill component of the national budget? • Are the growth strategies that are formulated in the country given enough time to realise their objectives before moving to the next one? • South Africa responded to the effects of the global financial crisis, low economic growth and high and persistent unemployment, with counter-cyclical fiscal policy. That is, increasing government spending during periods of weaker economic conditions to stimulate economic activity. South Africa consequently began running a fiscal deficit in 2009/10 in the wake of the global financial crisis, after 3 years of surpluses. Will South Africa continue to embrace counter-cyclical policy?

  15. Issues for Consideration Economic and Monetary • Certain risks facing South Africa are external, i.e. US Fed tapering, global recovery and commodity prices, but we also face local risks such as labour unrest, a growing public sector wage bill, energy shortages, slow implementation of policy and volatility of the exchange rate. What measures are in place to ensure these risks are mitigated? • Inflation targeting regime. Should the band be reconsidered? • What options does South Africa have to protect the value of the Rand? • Will further depreciation of the Rand result in missing the budget deficit target (4.3% for 2013/14)?

  16. Thank you Prof. M Jahed Alfred Monnakgotla MmapulaSekatane NeliaOrlandi RashaadAmra

More Related