Economics weekly
Monetary and fiscal policy: The nexus
The National Budget has finally been tabled, exhibiting tight fiscal manoeuvring as confidence and growth hang in the balance. Ultimately, the budget reflected slippage as spending pressures persist, and while tax increases have reduced the spillover to the deficit and borrowing requirement, fiscal policy is looser than previously envisioned. Importantly, this is at a time when monetary policy has gradually become less restrictive on economic activity and is expected to be neutral by the end of the year. Question is, does the fiscal outlook warrant more caution on the monetary front?
14 March 2025
