Lukanyo Mnyanda Editor: Business Day

SA faced the Covid-19 pandemic under strained conditions after failing to reverse a sharp increase in government spending after the global financial crisis and now needs "substantial" spending cuts, Reserve Bank governor Lesetja Kganyago said.

"When the global financial crisis hit our shores in 2008-2009, SA had been running small budget surpluses and the debt-to-GDP ratio was under 30%," Kganyago told a webinar hosted by the University of Pretoria on Monday. "This allowed for increased government spending, part of which was initially justified as countercyclical stimulus but which was not subsequently reversed."

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