Finance Minister Malusi Gigaba's 2018 budget may have staved off a potential credit ratings downgrade next month but it has done little to quash concerns that South Africa is edging towards a fiscal cliff. "We are one step closer to the fiscal cliff, we are incrementally more fragile than we were a year ago," George Glynos, MD of ETM Analytics, said. "It takes a long period of time to degrade your fiscal quality to the point where you no longer have a fiscal buffer. At the point where you have no fiscal buffer you leave yourself vulnerable ... and then you go into a full-blown default situation." Glynos said there had been no perceptible improvement in the debt-to-GDP ratio over the past four to five years, which had started out at 25% at the end of Trevor Manuel's tenure as finance minister, when former president Jacob Zuma began his term. Under the five ministers that have followed, the ratio has risen to above 50%. In the latest forecast, the Treasury has revised the ratio to 56%...
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