Government’s commitment to put measures in place to respond to the impact of severe weather events and the tax incentive rebate relating to the installation of new and unused solar panels, welcome positive steps forward.

Budget 2023 is as good as we could have hoped for, given current economic conditions. The National Treasury has lifted the expected government debt trajectory, but, importantly, it continues to map a path to fiscal sustainability and a lower government debt ratio in the long-term.

Dr Elna Moolman, Head: South Africa Macroeconomic, Fixed Income & Currency Research at Standard Bank South Africa shares some notes on the 2023 National budget speech.

The minister is to be congratulated on his foresight to increase the Section 12B tax allowance from 100% to 125%. This means that businesses will definitely look to invest in solar which will assist with the energy crisis in SA.

Load-shedding, political instability and higher food prices shatter consumer finances according to the latest Momentum Consumer Financial Vulnerability Index

Over the medium term, it seems most unlikely that the National Treasury will be able to map a path to a smaller Main Budget deficit of -3.3% of GDP by 2025/26 as projected in the 2022 MTBPS, given lower GDP growth momentum and ever-growing expenditure demands.