IMF bailout — are we there yet?
A debt crisis is avoidable if steps are taken to tackle the trajectory of borrowing
In the wake of the gloomy numbers contained in finance minister Tito Mboweni’s medium-term budget policy statement (MTBPS), there is increasing concern among investors that SA will have to turn to the IMF for a bailout to fund the country’s growing debt levels.
In the medium-term budget, the government budget deficit showed a worrying increase to 5.9% of GDP for the current financial year from 4.5%, peaking at 6.5% next year and returning to 5.9% in 2022/2023. At the same time, the total debt burden was adjusted higher at 61% of GDP from 57% in the current year, rising to 71% by 2022/2023 in the absence of any further measures to constrain expenditure or raise revenue...