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Budget Speech 2020

2. Economic Context


What are the conditions under which we must implement our plan to win?


In 2020, global economic growth is expected to strengthen to 3.3 per cent. Global inflation remains contained. Global monetary policy is supportive, and we are benefiting from demand for emerging market assets.


Asia (excluding Japan) is expected to grow by 5.8 per cent in 2020. The Coronavirus is a source of uncertainty to this forecast.


With growth of 3.5 per cent, sub-Saharan Africa is forecast to be the second-fastest growing region in the world.


Against this backdrop we forecast that the South African economy will grow by 0.9 per cent and inflation will average 4.5 per cent in 2020.


Over the next eighteen months, the economy should get a number of jump starts.


These include, amongst others:

1. The fruits of the reform agenda led by the President
2. Lower inflation
3. The interest rate reduction earlier this year
4. The recent gains in platinum group metals prices
5. The impending change to the electricity regulatory framework
6. The tax proposals we are setting out today


Persistent electricity problems will, however, hold back growth. Over the next three years, we expect growth to average just over 1 per cent.


Therefore, a stable supply of electricity will be our number one task.