While there are early signs of a recovery in the local economy, with expected business conditions improving, government now needs to show - through its Budget later this month - that it has the credibility to take the country forward and build business and consumer confidence.

Speaking at a roundtable on Friday, financial services provider Citi South Africa chief economist Gina Schoeman said there was still no structural underpin to the economy, which was the biggest challenge to the country's gross domestic product growth, with a lot of boxes still needing to be ticked.

These included questions around State-owned entities, education, labour compensation and the [Jacob] "Zuma factor".

However, Schoeman quipped that this was the first Budget that was almost "unforecastable", and that economists were unsure about the steps that government would take to boost fiscal growth and narrow the current account deficit.

These include the possible implementation of increases in value-added tax and personal income tax.

"We know [the National] Treasury is going to be announcing revenue initiatives and we know they are going to be cutting expenditure," she said.

Schoeman further pointed out that it was still unclear as to what government's plans were around the proposed introduction of free higher education. "Just trying to get a sense of that is, in itself, a nightmare going into this Budget."

"We've got to jump over the Budget hurdle, which is linked to Moody's [possible downgrade] hurdle, [and that will] determine the currency and whether the cyclical upturn [is sustainable]," she said, adding that February would be a watershed moment for the country, as it would demonstrate if there was political will to consolidate the Budget.

She added that the only thing that was holding back the start of an upward movement in economic growth, was the lack of confidence.

"However, it is very difficult to pinpoint how much confidence gives you how much growth," she noted.