South Africa’s main budget deficit for the 2022 fiscal year was smaller than the government’s estimate after better-than-expected revenue collection and spending that undershot projections.
SA's economy recorded a shortfall of 5.2% of gross domestic product on its main budget — which excludes total spending by provinces, social security funds and some state entities — for the year through March 2022, the National Treasury said in an emailed response to questions on Thursday. The monthly budget data showed a shortfall of R325.7 billion for the fiscal year.
That compares with a revised estimate for a gap of 5.5% of GDP that Finance Minister Enoch Godongwana presented on 23 February and is improvement from the 9.9% of GDP recorded in the prior fiscal year, when the coronavirus pandemic wrought havoc on the economy.
While the Treasury cautioned that the outcome is preliminary, the better-than-expected figure means the deficit on the consolidated budget could be less than the budget projection of 5.7% of GDP.
The smaller gap comes as revenue was buoyed by higher corporate income, thanks to a rally in commodities, and value-added tax. Income exceeded estimates by R12.2 billion, while spending undershot forecasts by R9 billion, the Treasury said.
The smaller shortfall bolsters the Treasury’s chances of achieving a primary budget surplus — where revenue exceeds non-interest spending — in the 2024 fiscal year. That’ll bring its multi-year fiscal consolidation efforts to a close and allow the government to “reconsider the funding of South Africa’s priorities” in a more stable environment, it has said previously.