In October, during the 2018 Medium Term Budget Policy Statement (MTBPS), I outlined our main budget fiscal outlook. At that time, I projected that in 2018/19 tax revenue would be R1.3 trillion and that spending would be about R1.5 trillion. That left us with a budget deficit of R215 billion, or 4.3 per cent of GDP.

I said that we were at a crossroads, and that we could go either to heaven, or the other way.

Then, we expected economic growth of 0.7 per cent in 2018. This is still our estimate. But, many of the risks that we warned about have materialised. We now expect a slower but still steady recovery after the 2018 technical recession. It is expected that real GDP growth in 2019 will rise to 1.5 per cent, and then strengthen moderately to 2.1 per cent in 2021.

South Africa is a small open economy and we are impacted by events in the global economy

World growth is now expected to slow, constraining South Africa’s export growth forecast.

These macroeconomic conditions have led to a weaker economic outlook.

Madam Speaker, walk with me on a journey of how we have chosen to respond to the challenges facing us.