Page 40 - Demo

Estimates of the Provincial Revenue and Expenditure (EPRE) %u2013 2025/26 Financial YearOutlook for Selected BRICS and Developing Economies Brazil: Economic growth remained robust in 2024 anchored by resilient private consumption and private investment. However, owing to ongoing restrictive monetary policies medium term growth is expected to remain moderate at 2.2 percent. India: In 2024 growth is estimated to have slowed to 6.5 percent following lower industrial activity, however, for the medium-term prospects for the Indian economy remain positive with the economy expected to maintain its high growth potential. China: For 2025 growth for the Chinese economy is expected to come out at 4.6 per cent following a strong fiscal response by the Chinese policy makers to counteract the negative effectson investment of global trade policy uncertainty and slowing property market. For the mediumterm growth is expected to stabilise at 4.5 per cent as global trade flows normalize and the labour force participation in the Chinese labour market improves. Sub-Sahara Africa (SSA): Growth in the SSA region has been subdued and uneven across countries averaging between 3.6 to 3.8 per cent in the previous two years. For the medium-term growth is expected to recover modestly to 4.2 per cent for the region as policy makers grapple with the complex interplay of rising government debts and tight external financing, poverty, and weak governance institutions. Policy makers in the region for the near-term will be tasked with maintaining a tricky balance between macroeconomic stability, addressing immediate socioeconomic development needs, whilst introducing necessary but costly policy reforms to improve the region%u2019s long-term growth potential.Domestic Economic Outlook Following its brief recovery in 2022, the domestic economy slowed down to 0.7 per cent in 2023 owing to widespread disruptions and bottlenecks in domestic rail and ports operations. The slow pace filtered over to 2024, driven in part by lower household consumption, declining private sector fixed investments, droughts and animal disease outbreaks that affected mainly the agricultural sector in the latter half of the year. For 2025, economic growth is projected to be 1.4 per cent and is forecasted to average 1.7 per cent for the next two years. Household Consumption: For 2024, growth in household consumption expenditure is expected to be moderate at 1.0 per cent, reflecting a slower pace of growth in real household disposable incomes and expenditure in the first half of the year. Lower household expenditure growth in 2024 was recorded for both durable and non-durable goods and services, whilst household debt as proportion of disposable income remained high, at 62 percent. Debt service costs also remained elevated. For the medium-term household expenditure is expected to gradually improve as consumer confidence recovers in line with slowing consumer price inflation, reductions in borrowing costs and improvements in labour market outcomes. Government Expenditure: For the 2024/25 financial year, consolidated government expenditure is estimated to have totalled about R2.4 trillion generating an overall budget deficit of R357.6 billion or 4.8 per cent of GDP. Non-interest government consumption expenditure over the medium-term is expected to remain restrained to protect payments for capital assets (mainly for infrastructure) and expenditure on %u201csocial wage%u201d services %u2013 i.e. education, health, social protection, community development and employment programmes. 19