The focus of provincial fiscal policy in its broadest sense is to
address social and economic challenges, and specifically in
our country, to address the problem of poverty. It is widely
recognised that the most sustainable way to uplift the poor is
through sustainable economic growth and job creation. These
objectives are currently both a national and provincial
imperative.
This chapter provides an overview of the most recent global,
national and regional domestic socio-economic developments
that forms the backdrop to the Western Cape Government
budget.
On the international front, global economic growth has further
moderated during 2012. Both advanced and emerging and
developing economies performed below-par, mainly due to
weak growth in advanced economies. A number of risks to the
outlook therefore remain.
Similarly, South African economic growth is expected to have
slowed in 2012. Current forecasts suggest that growth will likely
remain under pressure in 2013, before accelerating in 2014. Risks
rest mainly on domestic concerns, especially in respect of
employment and labour market dynamics.
Economic activity in the Western Cape is expected to remain
positive over the medium term, driven by the tertiary sector.
The growth rate is projected to accelerate in 2014 and beyond.
2013 OVERVIEW OF PROVINCIAL REVENUE AND EXPENDITURE
2
Risks to the regional economy remain tied to growth prospects
in advanced economies via the impact on exports, as well as
domestic labour market dynamics. Recent labour market
statistics indicate stagnation in employment, both nationally
and provincially. Unemployment continues to rise in the Western
Cape, driven by the increase in non-searching unemployed.
Increasing employment thus remains a key policy challenge.
A selection of key development indicators used to inform
government’s planning toward enhanced growth and
improved development outcomes are also highlighted in this
chapter.