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Large national debt is not yet a problem, Malusi Gigaba tells MPs
Gross national debt of 60% is not necessarily a problem, says finance minister
Gross national debt of 60% is not necessarily a problem, Finance Minister Malusi Gigaba said in Parliament on Tuesday. Responding to questions in the National Council of Provinces, Gigaba said rising national debt became a problem when economic growth continued to slow down, unemployment increased and the state failed to find new tax revenue. After last week’s medium-term budget policy statement, sovereign credit ratings agencies raised concern about SA’s debt sustainability and its poor tax revenue collection. In his speech, Gigaba painted a bleak picture of the state of SA’s economy, with the projected revenue shortfall for 2017-18 a staggering R50bn, due to slow growth and poor tax collection. The consolidated budget deficit would jump to 4.3% of GDP in the next fiscal year, against a target of 3.1%. The Treasury also expected the gross national debt to reach 60% in 2020-21 and for GDP growth to average 1.7% over the medium term. "On the face of it, 60% is not a problem," Gigaba ...
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