KUBEN NAIDOO: SA has to reduce the deficit — and that is what the budget does
Economists who call for more spending should name the successful countries that have a budget deficit of 15% of GDP
A group of economists has written an open letter to the president and MPs asking them to reject the supplementary budget tabled by the finance minister on June 24. Yet failure to support the budget will make our fight against Covid-19 harder, prolong the recession and delay SA’s economic recovery.
We all agree that the government should respond to the economic impact of Covid-19 and ensuing lockdowns through a countercyclical fiscal and monetary response. We all agree that we should spare no effort in allocating resources to support our health sector, households and firms during this extraordinary recession. If firms and households do not get sufficient support, the fight against the virus will falter, more firms will fail and jobs will be lost. A higher level of closures and job losses will further delay the country’s economic recovery...