DUMA GQUBULE: Numbers don’t add up in combined stimulus package
How can banks, which will suffer huge loan defaults and impairments as thousands of SA businesses go under, lend so much money into an economy that is collapsing?
In a recent note a Russian economist, quoted in the Financial Times, said of her country’s Covid-19 stimulus package that the Kremlin “intends to spend as little as possible while being able to officially refer to a substantial rescue package”.
The newspaper noted that officials had added Russia’s deficit spending (3.7% of GDP) to the stimulus (2.8%) to arrive at a figure of 6.5% of GDP. But most of the stimulus had come from tax holidays and loan guarantees. The direct state contribution was only 0.3% of GDP, the economist said. ..