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23 October 2017

Budget blues

On the local front, we expect a terrible budget on Wednesday — simply put, there are no more rabbits to pull out of the hat. We expect the headline 2017/18 budget deficit to be revised to 4.1% of GDP from the February target of 3.1%, the largest slippage for a current fiscal year relative to February budget projections going back to 2009. This puts us at the high (worst) end of expectations: the Reuters survey ranges from (a non-credible) 3.1% to 4.1%. What’s more, on a cross-country comparative basis, South Africa will have the second-largest budget deficit as a percentage of GDP in the EM universe this year...

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