MAMOKETE LIJANE: Fiscal anchor makes sense as debt pile bears down on SA
Such an anchor could provide policy credibility
The National Treasury’s medium-term budget policy statement (MTBPS) showed policy continuity and ongoing commitment to structural reforms. This will anchor the credibility of the government of national unity. However, a look under the hood reminded me that things deteriorated greatly under previous administrations and we have grave problems that will take political will and commitment to resolve.
SA is not out of the woods insofar as long-term fiscal sustainability is concerned and the MTBPS shows this. Many in the bond market had assessed that there was scope, though small, for the Treasury to reduce borrowing. The authorities’ decision not to lower bond issuance is instructive. There is little space to curb borrowing because cash requirements, especially beyond the near term, remain punishingly high. ..
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