South Africa’s budget deficit will probably be 4.5 percent for the 12-month period that ended yesterday, Finance Minister Pravin Gordhan said.
The fiscal gap is narrower than a previous estimate of 4.8 percent of gross domestic product, Gordhan told reporters in Pretoria today. The government collected 742.7 billion rand ($96.8 billion) of revenue, 4 billion rand more than forecast, he said. Government spending was 968.5 billion rand, 4 billion rand less than previously estimated, he said.
The “domestic environment is improving,” Gordhan said. “Given the mild optimism about the prospects ahead of us, we can see that revenue performance is following some of those indicators.”
Standard & Poor’s cut the outlook on the nation’s credit rating last week to negative as growth in Africa’s largest economy slows this year, making it harder for the government to rein in the fiscal deficit. The government unexpectedly lowered its target for the budget gap this fiscal year as tax revenue is forecast to rise.
Economic growth will slow to 2.7 percent this year from 3.1 percent last year, Gordhan said on Feb. 22. Reserve Bank Governor Gill Marcus revised the bank’s forecast higher to 3 percent on March 29, citing an improved global outlook.
The deficit is projected to be 4.6 percent of GDP in the year through March 2013, 4 percent in the 12 months through March 2014 and 3 percent in the year after that, according to the National Treasury on Feb. 22.
Personal income tax earnings rose 10 percent to 251.6 billion rand in the past fiscal year, the South African Revenue Service said in a statement today.
Value-added taxes gained 3.8 percent to 190.5 billion rand, while customs duties rose 29 percent to 34.3 billion rand, the tax service said.
Corporate tax revenue rose 14 percent to 153.7 billion rand, it said.
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