Despite fears of an economic relapse, particularly with international markets uncertain about the consequences of budget deficits in EU countries such as Ireland and Greece, Finance Minister Pravin Gordhan has managed to cut the deficit without having to sacrifice too much on the spending side.

Some of the main positives and negatives to come out of the speech were:

Positive

• Economic growth of 2.3% forecast for 2010, increasing to 3.6% by 2012;
• Personal tax relief of R6.5-billion; 
• The 2010 Fifa World Cup could contribute 0.5% of GDP growth in 2010. To date government has spent R33-billion on preparations;
• Inflation should average 6% during 2010/11;
• Funds to employ 15000 more policemen and women
• Exchange controls eased (although only slightly)
• A budget deficit decreasing from the 7.3% projected for 2009/10; to 6.2% for 2010/11; and 4.1% by 2011/12;
• Infrastructure investment of R845-billion over the next three years;
• Government will spend R52-billion on public works programmes in the next three years;
• Wage subsidy for young people proposed;


Negative

• Government revenue down by R69-billion;
• Government's net loan debt projected to rise to R1.3-trillion in 2012/13;
• Unemployment up to 24.3% in 2009

Reported by Fin24