FX.co ★ South Africa Sees Slightly Shorter Budget Gap

In the mid-year budget assessment, the South African government anticipates a more favorable fiscal outlook, albeit with a modest deceleration in economic growth projected for this year. The National Treasury has revised the consolidated budget deficit projection slightly downward to 4.7% of GDP, from the prior estimate of 4.8% made in May. The debt-to-GDP ratio is expected to stabilize at 77.9% for this fiscal year, marginally higher than the previous forecast of 77.4%. Additionally, economic growth projections have been adjusted to 1.2% for this year and 1.5% for next year, down from earlier predictions of 1.4% and 1.6%, respectively. Notably, Finance Minister Enoch Godongwana has announced a reduction in South Africa's inflation target to 3%, with a flexibility range of 1 percentage point above or below, marking the first alteration in this target in 25 years.