CAROL PATON: Without private sector help there are few options left to stop debt crisis
Finance minister Tito Mboweni can impose spending cuts, raise taxes and increase VAT or simply await a Moody’s downgrade
If there is one thing on which almost everyone agrees it is that SA is being overwhelmed by debt. Fewer people agree on what should be done, and even fewer on what is socially desirable within these options.
The debt picture is clear. SA is unable to service existing debt from revenue and must borrow to pay the country’s interest bill. This means at current economic growth levels the overall stock of debt will continue to rise exponentially. On the current economic trajectory SA’s debt to GDP ratio of 56.7% will exceed 70% by 2022 and 100% by 2030.