Gordhan sticks to budget forecasts

Government spending over the next two years will stick to the medium-term forecasts announced in February, Finance Minister Pravin Gordhan said.

In his 2012 Medium-Term Budget Policy Statement, tabled in Parliament, he said the third year (2015/16) would see some moderate growth.

According to the document, government spending is set to rise from the revised estimate of R1.057 trillion in 2012/13, to R1.339 trillion in 2015/16, while revenue is expected to grow from R900.6 billion to R1.205 trillion over the same period.

This makes for a deficit of 4.8 percent in 2012/13, but declining to 3.1 percent in 2015/16.

Real GDP growth for 2012 is now expected to be 2.5 percent, increasing to 4.1 percent in 2015, and GDP at current prices R3.202 trillion in 2012, and R4.264 in 2015.

CPI is expected to be 5.7 percent for 2012, dropping to 4.9 percent in 2015, and the current account balance (as a percentage of GDP) -5.9 percent for 2012, slowly dropping to -5.5 percent in 2015.

In terms of consolidated government spending, the health and social protection sector will continue to receive the lion's share over the medium-term expenditure framework (MTEF) period -- growing from a revised estimate of R246.2 billion in 2012/13, to R306.4 billion in 2015/16, an annual average increase of 7.6 percent.

The education sector follows with R220 billion in 2012/13, rising to about R269 billion in the outer year, an average of 6.9 percent a year.

Spending on local government, housing and community services is projected to rise from the revised 2012/13 estimate of R121.7 billion, to R157.5 billion in 2015/16, an average of nine percent a year.

The allocation for public order and safety goes from R99.7 billion to R119.7 billion over the same period, averaging 6.3 percent a year.

Spending on transport, energy and communication will increase from R83.5 billion to R105.1 billion, an average of 7.9 percent a year.

General and public services spending follows, growing from R53.3 billion in 2012/13, to R62.1 in 2015/16, averaging 5.2 percent a year.

Economic services goes from R44.6 billion in 2012/13, to R52.6 billion in the outer year, 5.6 percent on average a year.

The employment and social security sector is allocated a revised estimate of R43 billion in 2012/13, and R55.9 billion in 2015/16, increasing by 9.1 percent on average each year.

The defence and state security sector sees growth from R42 billion to R50.2 billion over the same period, 6.1 percent on average annually.

The smallest slice goes to science and technology, a revised estimate of R14.1 billion increasing to R16 billion in 2015/16, 4.1 percent on average a year.

Provision is also made for a contingency reserve of R4 billion in 2013/14, R10 billion in 2014/15, and R30 billion in 2015/16.