It has taken the Covid-19 crisis to push SA to this point, but finally, after years of prevarication, the government has accepted that SA’s public finances are dangerously overstretched and unprecedented spending cuts, coupled with deeper economic reforms, are needed to avoid a sovereign debt crisis.

The cabinet has been scared into accepting this prognosis from finance minister Tito Mboweni by the Covid-induced collapse in SA’s fiscal ratios. Based on National Treasury’s estimate that real GDP growth will contract by 7.2% in 2020, the consolidated deficit will double to 15.7% of GDP, and gross debt will exceed 81% of GDP in the current fiscal year...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as articles from our international business news partners; ProfileData financial data; and digital access to the Sunday Times and Sunday Times Daily.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now