The current political economy and the recent uncertainty between the presidency and national treasury is fomenting new financial and economic scenarios for SA.Government’s official policy is aimed at creating and establishing fiscal consolidation and fiscal discipline.National government has however, lost the fight against corruption, inflation and job creation. This is the result of having an official policy on the one hand but in practice we are seeing signs of government taking a path leading towards fiscal expansion, fiscal erosion and eventually, I believe, towards a fiscal cliff.SA faces three potential scenarios which must, at all costs, be avoided.These are:* Downgrading;* Recession; and* Fiscal crisis.If the "state capture" saga and state guarantees to failed state-owned enterprises continue, it is more than likely that once downgrading kicks in it will have a domino effect with devastating consequences for the economy and more than likely push our economy towards a fiscal ...
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