“Mini Budget”: New inflation target and debt commitment solidify SA's post-grey List credibility
Cross-border payments provider Verto today welcomed the Medium-Term Budget Policy Statement, stating that Finance Minister Enoch Godongwana delivered the necessary macroeconomic certainty to fully leverage the country’s recent exit from the FATF grey list.
Verto had called for the mini budget to reinforce South Africa’s commitment to financial stability and regulatory certainty, leveraging the "massive credibility boost" of the delisting.
“The Minister has met the moment,” said James Booth, Verto’s Head of Revenue.
“Exiting the FATF grey list was the essential regulatory win. Today, the commitment to stabilise debt at 77.9% of GDP and the bold announcement of a new, lower inflation target of 3% with a 1 percentage point tolerance band are the crucial fiscal and monetary follow-ups required to solidify that credibility.”
Verto believes the lower inflation target is a major boon for the cross-border payments ecosystem. The Minister stated that over time, the lower target will decrease inflation expectations and inflation, creating room for lower interest rates and boosting economic growth.
“A stable currency is a major determinant of the cost of cross-border trade,” Booth explained.
“The new inflation target signals a fundamental commitment to long-term price and currency stability, which will further reduce friction, compliance costs, and processing delays for international transactions”.
However, Verto noted that while the macroeconomic framework is sound, the Minister did not announce specific new policies on capital flow or currency management to reduce friction for international traders.
“The foundation has been laid. Now, we look to the next fiscal cycle for targeted policies that will reduce the operational friction in capital flow and explicitly support the fintech sector to fully realise the benefits of this financial stability for South African businesses trading globally,” said Booth.
Article Enquiry
Email Article
Save Article
Feedback
To advertise email advertising@creamermedia.co.za or click here
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
AxFlow AQS Liquid Transfer (Pty) Ltd is an Importer and Distributor of Pumps in Southern Africa
VISIT SHOWROOM
Rooted in the hearts of South Africans, combining technology and a quest for perfection to bring you a battery of peerless standing. Willard...
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
