EDITORIAL: Government needs to make tough decisions
Medium-term budget expected to show public finances are in a worse state than previously projected
The alarm bells are ringing ahead of October’s medium-term budget, which is expected to show SA’s public finances are in significantly worse shape than finance minister Enoch Godongwana projected in his February budget.
IMF first deputy MD Gita Gopinath (https://www.businesslive.co.za/bd/economy/2023-09-04-imf-number-two-gita-gopinath-warns-of-sa-debt-spiral/) warned last week that the cost of servicing government debt could rise from 19% of state revenue in 2023 to 27% by 2028 — more than twice the health budget — if the government does not take firm action on fiscal consolidation. The ballooning debt costs reflect a government debt burden that is expected to climb to more than R5-trillion in a context in which SA finds itself borrowing at ever higher rates...
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