Debt rule could give SA credibility but needs political buy-in, says BER
Bureau for Economic Research recommends steps and rules to stabilise public debt, leading to the introduction of legislated debt anchor
A fiscal rule could improve the sustainability and credibility of SA’s public finances and provide positive signals, but such rules are not a silver bullet, and sufficient political buy-in and an appropriate design would be required for it to succeed, says the Bureau for Economic Research (BER).
In a new report, released a month before finance minister Enoch Godongwana tables the budget on February 19, the Stellenbosch-based BER supports the new fiscal rule that the Treasury proposed at last February’s budget. But it recommends a sequence of steps and operational rules to get SA to the point at which it stabilises the public debt and can introduce a suitable, legislated debt anchor...
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