Jonas recommits to fiscal consolidation

As Treasury met with Fitch Ratings agency, Deputy Finance Minister Mcebisi Jonas reiterated that government is committed to fiscal consolidation.

Parliament - South Africa Deputy Finance Minister Mcebisi Jonas reiterated on Tuesday that government was committed to fiscal consolidation, as National Treasury met with Fitch Ratings agency.

“We are in the process of ratings agencies reviewing South Africa’s [credit] rating at the moment. Today (Tuesday) we had a meeting with Fitch which was focusing on what do we see as a critical way forward,” Jonas told the National Assembly in the debate on the Division of Revenue Bill.

“It is very clear: our stance remains that fiscal consolidation and inclusive growth are going to be the two central platforms moving forward,” he continued.

The finance ministry is seeking to avert a further downgrading of the country’s rating, which Fitch has at BBB- with a “stable” outlook. Standard and Poor Global Ratings has South Africa on the same grade but with a “negative” outlook.

At its last assessment in June, Fitch had flagged low GDP growth as a concern.

Finance Minister Pravin Gordhan in the medium-term budget policy statement last month, adjusted his GDP growth forecast for the year downwards to 0.5 percent, rising to 2 percent in 2018.

He signalled coming tax hikes to counter the dampening effect low growth has had on government revenue.

The bill was not passed on Tuesday as the National Assembly did not have a quorum.

African News Agency