• Is South Africa approaching a fiscal cliff, economists wondered this week after the National Treasury projected the government's debt-to-GDP ratio would rise to 60.8% over the next four years. The cost of servicing government debt is projected to be the fastest-growing expenditure over the next three years, rising at an annual rate of 11%. By 2020-2021 nearly 15% of the main budget revenue will be spent on servicing debt. The budget deficit will widen as tax revenues fall short. At worst, a country on the edge of a fiscal cliff no longer has the ability to hike taxes and/or cover its commitments. Investment Solutions chief economist Lesiba Mothata said: "If a tax authority can come and say I want to hike corporate taxes from 28% to 30% and they do that and it creates a deep recession, that's a country materially impaired in terms of hiking taxes." When Greece was considered to be on the edge of a fiscal cliff in 2012 it had a debt-to-GDP ratio of 159.6%, which rose to 179% in 2016...

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