Analysts said Ramaphosa’s announcements ahead of the Medium-Term Budget Policy Statement this month could be a deal-breaker for the battered economy, with investors keen to see whether it will be bold and decisive.
Els said the government should allow the private sector more space by privatising certain state-owned companies and deregulating the labour market. He said such a policy departure would likely be opposed by organised labour, although it would change investors’ perception of the government’s willingness to resuscitate the economy.
The country’s gross domestic product fell by 17.1percent in the three months to June, and 2.2million jobs were lost in the same period as the lockdown impacted activity. In June, Finance Minister Tito Mboweni said the government needed to find spending cuts of about R230billion over the next three years, as the economy was expected to experience its biggest contraction in 90 years.
Gross tax revenue has been revised downwards as the government expects to miss the tax target for this year by more than R300bn.
Source: News Formal (newsformal.com)
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