BRIAN KANTOR: Yes, we have a fiscal problem — and growth is the solution
Only faster growth can prevent an interest rate trap if government spending continues to rise
22 September 2023 - 05:00
An unexpected decline in SA government revenues has provoked something of a fiscal contretemps. A R60bn revenue shortfall from the estimate in the February budget has followed an even larger windfall in 2021 linked to the post-Covid-19 inflation of metal prices.
The recent pullback in metal prices and mining company profits has seen government revenues fall back sharply, from peak growth rates of 25% in late 2021 to zero growth. Government expenditure has stayed on an essentially modest growth tack of about 5% a year. ..
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