Goldman Sachs believes South Africa is unlikely to suffer the large revenue shortfall projected by its finance minister and that the nation’s path for fiscal consolidation remains credible. Finance Minister Enoch Godongwana painted a bleaker-than-expected picture when he delivered a medium-term budget update last week with a slightly wider deficit. Despite this caution, South Africa remains on track to stabilise debt and bring if below 70% of gross domestic product by the end of the decade, Goldman economist Andrew Matheny said. “We would be surprised if you get the magnitude of revenue shortfall that they’re pointing to,” Matheny said. “We are more optimistic. If anything, we think they’re probably being overly conservative here.” Economists had expected a revenue shortfall of around R12-billion. Instead, Godongwana announced a R22-billion gap, widening the deficit to 5% of GDP from 4.5% projected in February. Goldman had seen scope for a possible improvement on South Africa’s sub-investment-grade credit ratings within six months. While it may not happen that soon, a positive outlook remains on the cards, Matheny said.