The policy statement gives the government's projection of economic growth and government spending. Gigaba announced that growth for the 2017/18 fiscal year is projected at 0.7%, revised downwards from 1.3%, while both the budget deficit and overall government debt are set to rise. Additionally, Pretoria is grappling with a tax revenue shortfall of 50.2 billion rand (3.5 billion dollars).
Forthcoming public sector wage talks and union demands may add further pressure on the treasury and increase revenue shortfalls.
Institutional instability at the South African Revenue Service (SARS) means lagging tax collection could persist in the short term.
Southern African Customs Union (SACU) members will suffer further declines in government revenue, impacting Lesotho and Swaziland most.
