Inflation's ripple effects: A closer look at Budget 2023

In February last year, Treasury estimated that CPI inflation would be 4,8 percent. By October, it was predicting 6,7 percent. StatsSA reported 6,9 percent inflation in 2022.

Jones Gondo, a senior credit strategist at Nedbank, explains that this underestimation will likely result in more tax revenue and help to keep down the debt-to-GDP ratio. It will also render the government's spending plans unrealistic.