Carol Paton Editor at Large

SA’s R500bn support package will not be enough to prevent a sharp contraction in GDP over 2020 and will lead to a significant jump in debt, Moody’s Investors Service said in a report issued on Friday.

Moody’s, which stripped SA of its last remaining investment-grade rating in March, expects the country’s budget deficit to surge to 13.5% of GDP in the 2020 fiscal year, up from its previous forecast of 8.5%. That will push the country’s burden up by 15 percentage points to 84% of GDP, inclusive of guarantees to state-owned enterprises, said the report.

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