How to fund the deficit
SA needs a new funding plan for next year — one that boosts investor expectations of growth. Economic reforms are urgent and imperative. Tinkering with quixotic policies will only prolong the agony
SA’s most pressing fiscal problem is how to fund the R500bn deficit projected for next year once the country has used up the International Monetary Fund (IMF) and other international loans obtained to plug this year’s swollen, Covid-related borrowing requirement.
The local bond market is flashing strong warning signs that SA’s fiscal situation is not sustainable, and that it cannot be relied upon to continue to absorb ever larger amounts of SA government debt.