UPDATE 2-South African rand firms after mid-term budget, despite wider deficit forecast

(Updates prices to reflect afternoon trade, analyst quote in paragraph 8)

By Tannur Anders and Rachel Savage

JOHANNESBURG, Nov 1 (Reuters) - The rand strengthened on Wednesday after South Africa's mid-term budget statement, despite the proposal for tax measures next year to raise additional revenue as budget deficits are projected to widen over the next three years.

At 1510 GMT, the rand traded at 18.5975 against the dollar , over 0.3% stronger than its previous close.

The dollar last traded around 0.07% stronger against a basket of global currencies.

Finance Minister Enoch Godongwana announced that revenue collections in the current 2023/24 fiscal year were below estimates in the main February budget.

The Treasury said it remained committed to stabilising public finances through spending cuts and unspecified tax revenue measures, as well as a reconfiguration of government that would involve the merging or closure of state-owned entities (SOEs).

"The positive response by the ZAR is perhaps a sign of approval pertaining to the suggested fiscal discipline and no news of further allocations to ailing SOEs," said Shaun Murison, a senior market analyst at IG.

Major constraints on South Africa's economic growth in the past decade have been rolling power cuts, as utility Eskom struggles with breakdowns of its ageing coal plants, and underperformance at state-owned logistics company Transnet.

"The overall message is doubling down on spending-led fiscal consolidation and what is most striking... is the downward revisions to primary spending next year and in the forecast horizon," said Andrew Matheny, economist at Goldman Sachs.

International investors responded positively to the budget, after the government's sovereign dollar bonds fell as much as 0.6 cent earlier in the day.

Longer-dated notes rose the most, with the 2052 maturity up 1.021 cents on the dollar to 78.716 cents at 1508 GMT.

"The main positive is that there is no additional (bond) issuance over and above what was already factored in," Nick Eisinger, co-head emerging markets active fixed income at Vanguard, said. "That has seen the bonds rally a bit."

On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed almost flat.

South Africa's benchmark 2030 government bond was stronger, with the yield down 11 basis points to 10.565%. (Additional reporting by Marc Jones in London and Bhargav Acharya in Johannesburg; Editing by Nellie Peyton, Angus MacSwan, Shounak Dasgupta and Jonathan Oatis)