MIKE SCHUSSLER: More trouble lies ahead
News headlines scream about the seriousness of SA’s economic situation. But the country’s political leaders seem to have their heads in the sand
A ratings downgrade from Moody’s is very likely in the next month or so, given an average economists’ forecast of a budget deficit of more than 6% of GDP in 2020/2021 and 6% in 2021/2022, according to Reuters.
Meanwhile, with growth forecast below 1% this financial year, and about the same for the year after, the government’s debt to GDP is set to exceed 70%. Already, at just over 60%, SA has one of the highest debt-to-GDP ratios in the emerging-market universe.