SA’s economy likely to plunge 4% in 2020, says BNP Paribas

BNP Paribas, one of the world’s largest banking groups with operations in over 70 countries, expects SA’s economy to slump 4% in 2020, which will result in a sharp rise in government borrowing requirements and may prompt an approach to the International Monetary Fund (IMF).

The National Treasury is likely to raise bond issuance between 35% to 40% in coming weeks to cover a revenue shortfall as the global economic environment deteriorates, and SA’s budget deficit is likely to reach a record high in the 2020/2021 fiscal year, said senior economist at BNP Paribas SA Jeffrey Schultz in a note.