Economist Khaya Sithole says any relief South Africans may receive from rising fuel prices is likely to be temporary, with government facing difficult trade-offs as Finance Minister Enoch Godongwana prepares to deliver the Medium-Term Budget Policy Statement on Wednesday, 21 October.
The statement will outline government’s updated economic forecasts, spending plans and debt outlook amid pressure to ease the cost of living while managing public finances.
Sithole said fuel prices affect households and businesses across the economy, making the latest increases difficult for consumers to avoid.
“Even if some relief comes, it will be temporary and definitely won’t be the long-term solution that you need,” he said.
He warned that reducing fuel costs through government intervention would require sacrifices elsewhere in the budget, particularly as the state faces competing spending demands and high debt-servicing costs.
“The only difference between the relief versus the trade-off is that you and I will be able to visibly see the impact of the relief. You’ll pay less at the petrol pump,” Sithole said.
However, he cautioned that cuts to other priorities could have consequences in the longer term.
Sithole said government had limited room to increase borrowing because higher debt would raise interest costs and put further pressure on public spending.
He expects Wednesday’s statement to set out the measures government will consider in the coming months, rather than introduce major tax changes so soon after last year’s controversy over proposed VAT increases.
Sithole said addressing the country’s economic challenges would require coordination across government, rather than relying on National Treasury alone.
Photo: X/ @Treasury_RSA
