News about budget

The South African rand edged up roughly 0.2% in early Monday trade to 16.4475, as investors looked ahead to a busy week of economic data. The focus is on Finance Minister Enoch Godongwana's medium-term budget policy statement on Wednesday and September inflation figures. Nedbank expects headline inflation to rise to 4.8% in September from 4.4% in August, and retail sales growth to slow to 2.5% in August from 3.4% in July, with higher transport costs from fuel prices and rand depreciation as the main pressure. The 2035 benchmark government bond was little changed, with its yield rising half a basis point to 8.7%.

Japan's government is reportedly considering raising corporate tax to fund a rise in defense spending, according to Japan Today citing sources familiar with the matter. The option comes as Japan revises three key security policy documents by year-end, which would likely push defense outlays above 10 trillion yen (about $63 billion) annually. The next five-year plan, covering fiscal 2027 through 2031, will focus on large-scale drone procurement and securing ammunition and missiles for a prolonged conflict, with a rough official estimate putting total spending at 70 trillion to 80 trillion yen. Businesses may resist a tax increase over concerns about wage growth and international competitiveness, and it remains unclear whether enough revenue can be raised. Defense spending for fiscal 2023 through 2027 is projected at about 43 trillion yen, and the 2% of GDP target for fiscal 2027 was reached ahead of schedule in fiscal 2025 after Sanae Takaichi became prime minister.

Finance Minister Enoch Godongwana is likely to trim his 2026 growth forecast, which was 1.6% in the February budget, in his medium-term budget policy statement to parliament on Wednesday. The US war against Iran has hurt manufacturing and mining and pushed inflation sharply higher, and the South African Reserve Bank and the IMF have already cut their forecasts significantly. Spending for the first five months of 2026/27 reached 42% of the budget versus 41% a year earlier, while revenue of R812bn trailed the R868bn implied by the main budget, according to Investec economist Annabel Bishop. This week, Sacci releases its September business confidence index on Monday, and Stats SA publishes September consumer inflation on Wednesday, with Absa economists expecting a 0.2 percentage point rise to 4.6% on fuel prices.

Protests over living costs and declining public services turned violent in France this weekend, with almost 2,400 people arrested and nearly 1,000 police officers and gendarmes injured, according to the interior ministry. Shops were looted and buildings torched, including the 143-year-old town hall in Limoges, while a protester died of cardiac arrest in Paris. About 550,000 people marched nationwide, including 110,000 in Paris, but the violence came from fringe groups. President Emmanuel Macron ordered a review of intelligence and police preparedness and asked for concrete proposals to address the crisis. It comes as Prime Minister Sébastien Lecornu’s minority government seeks €54 billion ($61 billion) of 2027 budget savings amid a record €3.6 trillion public debt, or 119% of GDP.

Congress is in an October recess ahead of the midterms and must finish FY27 appropriations before the current continuing resolution expires on December 11. The White House appears to have backed away from an executive order giving political appointees control over NIH grants after bipartisan opposition, but appropriators are discussing language to protect grant decisions. President Trump proposed rescinding $810 million across 11 accounts just days before FY26 ended, and GAO concluded the Impoundment Control Act does not allow withholding such funds past expiration, a view OMB Director Russ Vought disputes. A GAO report found DOE had obligated about $51 billion (65%) of the $78 billion in remaining IIJA and IRA funds but disbursed only $6.6 billion (8.5%).

Farmers have urged UK Prime Minister Andy Burnham to fully scrap the inheritance tax on farms introduced under Sir Keir Starmer's government, warning it threatens family farms. The threshold was raised to £2.5 million (£5 million for married couples) after a backlash, but farmers say tax bills can force families to sell land and make farms unviable. Sandy Wade-Gery, 76, whose Bedfordshire farm has been in his family since 1536, fears his son may be the last to keep it unless the tax is abolished. The Countryside Alliance and NFU also oppose the tax, while the Conservatives and Reform UK have pledged to reverse the changes if they win the next election. Further changes are speculated for next week's budget as Mr Burnham seeks to repair ties with farmers.

A Grattan Institute report says state government debt has more than doubled since 2019, with the interest bill now at 0.6% of annual economic output, and warns that future Australians will pay for today's deficits through higher taxes or worse public services. An AMP survey finds more than half of adults under 30 have changed their plans to have children due to cost-of-living pressures, and saving a 20% deposit takes most more than a decade. To repair the budget, Grattan proposes raising the GST from 10% to 15% and taxing fresh food, which it estimates would raise an extra $76 billion a year, with $33 billion going to income tax cuts, $25 billion to welfare and rent assistance, and $18 billion to the states. It also recommends scrapping the 2018 GST deal with Western Australia to save $6 billion. The report notes Australia's tax take of 29.4% of GDP is below the OECD average of about 34%, arguing for modest revenue increases alongside spending discipline.

Farmers have urged Prime Minister Andy Burnham to scrap the inheritance tax on family farms in the upcoming budget, saying the policy often forces families to sell land to pay the bill. The threshold was raised from £1 million to £2.5 million (£5 million for married couples) after a backlash, but farmers say that is not enough. Sandy Wade-Gery, whose Bedfordshire farm has been in his family since 1536, warned that his son could be the last William at the farm. The Conservatives and Reform UK have vowed to reverse the changes if they win the next general election, while the NFU opposes the changes and the Countryside Alliance calls for the tax to be scrapped entirely. There is speculation that further changes could be announced in next week's budget as Burnham seeks to mend ties with farmers.

According to Hargreaves Lansdown, new state pensioners under 77 could receive up to about £488 more a year, as the triple lock forecast points to a 3.9% rise from April 2027. The increase is based on average wage growth of 3.9% rather than inflation of 2.9%, with the final figure due at the Budget on October 28. A full new state pension would rise from £241.30 to £250.70 a week, and a full basic state pension from £184.90 to £192.10 a week. New Prime Minister Andy Burnham has confirmed the triple lock will stand for the rest of this Parliament, despite earlier plans to scrap it from 2030. Helen Morrissey of Hargreaves Lansdown says the rise will help but will only cover the basics, urging people to boost pension contributions.

The People’s Budget Coalition (PBC) says the House-approved P7.2-trillion 2027 national budget contains P1.06 trillion in “red flag” allocations, including pork barrel projects and handouts it considers vulnerable to political patronage ahead of the 2028 election. The House reportedly cut P34.7 billion from the Metro Manila Subway and the North-South Commuter Railway, P53.5 billion from foreign-assisted bypass roads and highways, and P4.9 billion from DOH immunization, while redirecting P54 billion to local District Engineering Offices. Delays in foreign-assisted projects are adding costs; Finance Secretary Frederick Go said the government accumulated P3.4 billion in commitment fees from 2022. DOTr, seeking P12.8 billion to buy LRT-2 trains, is allowing public utility buses along the line as a temporary measure. Senate finance committee chair JV Ejercito pledged to restore and protect funding for the subway and railway lines.

About 550,000 people demonstrated across France on Saturday, according to the Interior Ministry; most marched peacefully, but a small minority attacked buildings, looted shops and clashed with police, and Prime Minister Sebastien Lecornu said 1,200 people were arrested and 150 officers injured. The protests began last month with high school students in Paris' northern suburbs angry over teacher shortages and poor facilities, then spread to other cities and joined trade unions, public sector strikers and “yellow vest” supporters. The anger is compounded by a proposed 2027 budget with a 54 billion euro package of cost-cutting and tax measures, including a freeze on civil servants' pay scale that unions say would be the fourth consecutive annual freeze. Experts say the crisis reflects deeper discontent with political paralysis since the 2024 elections, which left no bloc with an outright majority. President Macron said those responsible for violence would be “prosecuted and punished”, while Jean-Luc Melenchon accused the government of repressing students.

Ukrainian President Volodymyr Zelensky has asked European partners for at least 70 billion euros more for 2027 to fund defense, equipment and resilience, on top of a 90 billion euro loan already agreed for 2026-2027, and estimated the 2027 war will cost 155 billion euros. The EU has planned about 45 billion euros for 2027, and the European Commission acknowledged a funding gap but has not decided how to raise the extra money. Options including new loans, market borrowing backed by the common budget, frozen Russian assets or third-country contributions all face legal, political or burden-sharing obstacles. Czech Prime Minister Andrej Babiš said Czechia will not guarantee the funds, while Swedish Prime Minister Ulf Kristersson called a nearly 60% rise in Sweden's net EU budget contribution “completely unacceptable” and said a small group of countries cannot keep carrying a growing burden.

Campaign group FairFuelUK says more than 30,000 motorists, families, small businesses, tradespeople, farmers and hauliers have emailed the Prime Minister and Chancellor within 24 hours, ahead of the Budget on 28 October. The group is calling for an immediate cut and permanent freeze to Fuel Duty, plus a PumpWatch regulator with legal powers to investigate pump prices, and asks ministers to consider measures used in more than 40 countries. It also wants to meet founder Howard Cox to discuss his 20-year transport strategy, developed with input from more than 80,000 drivers. Cox argues cheaper fuel would lower business costs and inflation, while respondents, including a rural pensioner and a self-employed driving instructor, describe high fuel costs and limited public transport as a serious burden.

On October 15 in Brussels, ahead of an EU summit, Latvian Prime Minister Andris Kulbergs urged Europeans to help Ukraine by giving up a small expense, comparing the cost of aid to drinking one less beer per year. He said Ukraine needs the money now, as this winter is decisive, and framed aid as a shared European interest rather than a personal financial inconvenience. He also called for tougher sanctions against Russia. Earlier in October, Latvia approved humanitarian aid including medical equipment and ambulances, and its Economy Ministry plans to use remaining funds to buy 12 more diesel generators for Ukraine. Meanwhile, EU leaders are discussing Ukraine’s financial needs for 2027 amid disagreements over the joint budget, high energy prices and resource allocation, and the article notes that such contributions alone will not resolve Ukraine’s financial gap.

Bain & Co projects holiday retail sales in 2026 to approach $1 trillion, with the typical American household expected to spend about $900 on gifts, decorations and food. Mastercard forecasts the strongest holiday retail growth in four years, yet 77% of Americans plan to change their shopping habits due to rising prices, and 35% feel less financially stable than a year ago. Many consumers are still paying off last year's holiday debt, as more than one-third took on holiday credit card debt in 2025, averaging about $1,223 per person according to Capwolf.com. The article advises setting a holiday budget by category, tracking spending, and focusing on low-cost ways to give, such as visiting seniors, writing handwritten letters or supporting a family in need.

Opposition MP and former finance minister Colm Imbert told Parliament during the budget debate that he cannot support the 2026-2027 national budget presented by Minister Davendranath Tancoo, arguing the economy is in recession and will crash within the next couple of months if it has not already. He called the projected deficit “fictitious” and cited Ministry of Finance figures showing real GDP down 2.2%, energy down 6.6%, petrochemicals down 19.8% and visitor arrivals down 9.3%. Imbert said business lending growth fell from 11.4% in April 2025 to 0.6% in July 2026, which he attributed to a lack of confidence. He also claimed at least 70 new taxes and fees had been imposed on businesses in the past year, contrary to the UNC’s 2025 manifesto pledge to lower corporate taxes.

The IMF's latest forecasts show the global economy holding up better than feared despite the Iran war, higher interest rates and an AI-driven investment boom. Global growth is projected to rise to 3.4% in 2027 from an estimated 3.1% this year, with the US doing somewhat better than forecast and China unchanged at 4%. The article warns of risks including high energy prices, extreme weather, excess spending on data-centre technology and budgets in several advanced economies that are close to exhaustion, with France facing dimmer prospects amid a bond selloff. It argues that the burden of responding to any future downturn will ultimately fall on central banks, and quotes Singapore President Tharman Shanmugaratnam, who said the bond market pressure gives leaders a chance to put their finances in order.