Tax collection in the year to March was set to exceed an October target by R4 billion, helping to reduce the fiscal gap to 4 percent of gross domestic product (GDP) from an earlier projection of 4.2 percent, Gordhan said yesterday.
The deficit would remain at 4 percent of GDP next year, before narrowing to 3.6 percent and 2.8 percent in the following two years, he forecast.
While tax revenue has recovered, rising interest rates and a weaker rand will boost government debt over the next three years, risking further credit rating downgrades if economic growth weakens.
"We still have an immense set of tasks and challenges facing us," Gordhan said.
"We cannot just muddle through the next decade."
Gordhan lowered his estimate for economic growth this year to 2.7 percent from 3 percent and kept projections for the next two years unchanged at 3.2 percent and 3.5 percent.
The economy expanded 1.9 percent last year as strikes in mining and manufacturing and a slump in global demand curbed exports.
"At the heart of the story is really the lacklustre growth,"
"We are also concerned about the current account deficit and its financing. We currently have
"I don't think we've seen any major surprises."
Inflation is set to average 6.2 percent this year, exceeding the central bank's 3 percent to 6 percent target band, and to reach 5.9 percent next year, according to the Treasury.
Gross government debt will probably increase to 48.3 percent of GDP in three years' time from 45.8 percent.
"Gordhan is trying to balance two things, showing an adherence to fiscal discipline and maintain[ing] growth," Stanlib Asset Management economist
"That type of balance has been achieved. I think the credit rating agencies will be satisfied with the path of credit reduction."
Most Popular Stories
- Crimean Referendum Violates International Law: Obama
- Florida Insurers Reach Out to Hispanics
- House OKs $1 Billion for Ukraine
- BP Tripled CEO's Pay Despite Deepwater Horizon
- EU Breaks Off Talks With Russia
- Where Are the World's Most Expensive Cities?
- Putin Gets Thumbs-up From Assad
- Nakamoto 'No Longer Involved' in Bitcoin
- Cuba Accepts Invite for Talks With EU
- Disney Lays Off 700 From Interactive Unit