Treasury likely to revise growth forecasts upwards: Nene

On the back of improved business and investor confidence‚ the National Treasury will likely revise its growth forecasts for 2018 and 2019 in the medium-term budget policy statement in October‚ according to Finance Minister Nhlanhla Nene.

Giving his first address since his reappointment as finance minister at the FEDUSA leadership and collective bargaining conference in Kameeldrift on Monday to a warm welcome‚ Nene said: “We do not want to be overly optimistic‚ we want to be realistic but we will revise these numbers upwards come the MTBPS.”

According to the 2018 budget review‚ economic growth is expected at 1.5% in 2018 and 1.8% in 2019.

Nene said the election of President Cyril Ramaphosa had reignited business and consumer confidence.

“As a country we are at a point where we need to look back and reflect on a number of things that have happened. We saw the country go in a direction where we felt it was not serving the interests of the generations coming after us.”

He explained that in recent years‚ business and consumers had lost hope in the economy‚ with private investment contracting since 2015.

“I don’t want to take responsibility for that but it was because of low confidence.” Former president Jacob Zuma fired Nene in December 2015 to the surprise of markets.

“But the 2018 budget has the ability to inspire confidence with the expectation for the new president and leadership to finalise outstanding policy reforms like the mining charter.”

He added that in a meeting with Moody’s earlier on Monday‚ the credit rating agency welcomed that government was “putting dates to what we do”.

He added that there was also a commitment to act decisively against corruption and to move swiftly to solve governance issues in SOEs.

“These actions will improve policy certainty and boost confidence. Investment is more likely to create jobs and investor sentiment has already improved.”

He explained that rand had been stronger in recent weeks and that the government’s borrowing costs had decreased‚ making it cheaper to service its debt. Nene said debt had reduced by R20bn just with improved confidence.