Gordhan's budget 'realistic': economist
October 27, 2009
Minister of Finance Pravin Gordhan's Medium Term Budget Policy Statement (MTBPS) was described as "realistic" by economist Mike Schussler on Tuesday.
"As an economist, I take my hat off to the man," Schussler said after Gordhan delivered his first MTBPS speech to Parliament.
Schussler said the MTBPS was "very much a continuity of government policy".
However, he had some concerns.
"I am concerned about economic affairs getting less money and the size of government expenditure, but overall we got the support of government and government's spend is spread evenly."
Schussler said he was particularly pleased about the extra infrastructure spend.
He said the budget deficit as a percentage of gross domestic product (GDP) at 7.6 percent was "a huge problem".
"But Gordhan does bring it down to -4.2 percent in 2012/13 -- which is still high but I suppose necessary with the slowdown in the world economy."
Schussler said he was "a little worried" about Gordhan's assertion that there would be a debate about the inflation target.
"But this is certainly not a left-wing budget," Schussler said, adding that the left would dislike the announcement of the relaxation of exchange controls.
"However, I really welcome this step," he said.
Gordhan said GDP growth would be 1.5 percent next year, "which is where I am", Schussler said.
"The minister puts GDP growth for 2011 just under three percent and just over three percent for 2012 -- so this shows we are getting out of the recession but growth won't be anything near what we had from 2005 to 2007." - Sapa
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