Bailouts to push South Africa’s debt ratio above 70% of GDP
JOHANNESBURG – South Africa’s government debt will top 70% of gross domestic product in the next three years and may continue rising after that as bailouts for state-owned companies boost spending, according to the National Treasury.
The projected gross-loan ratio of 71.3% by 2023 compares with an estimate of 59.7% in the February budget, and will rise to 80.9% in 2028 unless steps are taken to reduce the budget deficit, the National Treasury said in its the medium-term budget policy statement published on Wednesday. The ratio was previously projected to rise to 60.2% in 2024, before decreasing in subsequent years.
“Government remains committed to fiscal sustainability, but there has been significant fiscal deterioration since the tabling of the 2019 budget,” the Treasury said. “Without intervention, the persistent gap between revenue and expenditure now puts government debt on an upward trajectory over the next 10 years.”
Source: iol.co.za
