BMI expects government to dig itself deeper and deeper into debt
Internal ANC politics in the run-up to the December conference will ‘limit appetite to enact unpopular fiscal reforms’, with dire consequences, BMI Research warns
With unemployment hitting a 14-year high and plunging business confidence likely to keep economic growth constrained, the South African government will continue getting deeper into debt as it spends more than it earns in taxes, BMI Research has warned. Although the government has said it plans to cut its expenditure ceiling by R10bn in 2018 and a further R16bn in 2019, BMI — which is a member of the Fitch group — questioned if the ANC had the political will to carry this through. "The ruling party faces a bruising fight between its traditionalist and reformist wings as it heads towards the December national elective conference where a new leader will be selected, which will likely limit appetite to enact unpopular fiscal reforms," it said in a note on Friday morning. "Perhaps even more pertinent, not only does the ruling ANC potentially lack the political will to enact fiscal consolidation, but increasingly it may also lack the popular credibility to do so. "[Finance Mininster] Malu...
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