Relative to earlier pessimistic views, budget was better than expected Credibility of fiscal plan keeps investors and citizens willing to wait and see By Gina Schoeman - 25 February 2021 Finance minister Tito Mboweni talks to President Cyril Ramaphosa ahead of his 2021 budget speech at parliament in Cape Town, on February 24 2021. Image: ESA ALEXANDER/ SUNDAY TIMES
A slightly adjusted version of a well-known John Maxwell quote speaks to SA’s fiscal path rather well: “Credibility is a country’s currency. With it, it is solvent. Without it, it is bankrupt.”
The 2021 budget was certainly better than expected relative to the Treasury’s far more pessimistic view back in October 2020. The budget deficit is now narrower as a percentage of GDP than before, but still the widest it’s ever been. The Treasury continues to push for debt stabilisation, thankfully at a lower peak of 88.9% of GDP in 2025/2026, and the one thing that keeps investors