Tito Mboweni’s emergency budget speech shakes the nation

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The death toll of COVID-19 has reached half a million as several countries grapple with a resurgence in cases after the relaxation of measures to slow down the spread of the virus. South Africa is starting to see the daily jumps in cases get bigger and bigger as the country’s cases close in on the 150,000 mark.

South Africa will be releasing the gross domestic product (GDP) data for the first quarter on Tuesday. With the country already in recession, the forecast of a 3.5% decline from the final quarter of last year looks grim for a country that’s already in a recession.

Emergency budget speech

South African Finance Minister, Tito Mboweni, delivered the coronavirus emergency budget speech last week Wednesday, making the original budget speech from February null and void. Mboweni commented on the budget deficit that is expected to reach 15.7% of the country’s GDP for the current financial year.

This is more than double February’s estimate of 6.8%. Growth forecasts have been slashed to contract by 7.2%, which would be the largest contraction in more than 80 years.

All of this, in addition to the sovereign credit downgrades and an already painfully slow economy growth rate that plagued the country before the virus, has led to a record high unemployment rate that peaked at 31%.

Market event calendar:

Tuesday 30 June

  • South Africa: GDP first quarter – expectation -3.5%
  • UK: GDP first quarter – expectation -2.0%

Wednesday 1 July

  • China: Caixin manufacturing PMI for June – expectation 50.3

Thursday 2 July

  • Australia: Balance of trade for May – expectation AU $9.1 billion
  • US: Non-farm payrolls for June – expectation 2.9 million
  • South Africa: SACCI business confidence for May – expectation 80.0

Friday 3 July

  • UK: GFK consumer confidence for June – expectation -32.0
  • Australia: Retail sales for May – expectation 16.3%

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Presh JM Reporter

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