BUDGET PREVIEW: Why this is a pivotal budget
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GUEST – Izak Odendaal - Old Mutual Wealth Investment Strategist
Almost every Budget Speech of the past decade has been called “pivotal”, “make or break” or something similar. And yet the great pivot never seems to arrive. Except for the brief post-Covid commodity boom, a decisive change in the country’s fiscal dynamics has yet to materialise.
Instead, government debt levels have increased sharply. Year after year, the Budget has projected a stabilisation of the debt-to-GDP ratio, and yet it still rises. It is not high by international standards, as chart one shows, but stands out for how quickly it has increased in the last decade.
Almost every Budget Speech of the past decade has been called “pivotal”, “make or break” or something similar. And yet the great pivot never seems to arrive. Except for the brief post-Covid commodity boom, a decisive change in the country’s fiscal dynamics has yet to materialise.
Instead, government debt levels have increased sharply. Year after year, the Budget has projected a stabilisation of the debt-to-GDP ratio, and yet it still rises. It is not high by international standards, as chart one shows, but stands out for how quickly it has increased in the last decade.
