{"id":4889,"date":"2021-02-21T17:55:17","date_gmt":"2021-02-21T17:55:17","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/?p=4889"},"modified":"2021-02-21T17:51:17","modified_gmt":"2021-02-21T17:51:17","slug":"mboweni-out-to-juggle-the-countrys-fiscal-metrics","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/mboweni-out-to-juggle-the-countrys-fiscal-metrics","title":{"rendered":"Mboweni out to juggle the country\u2019s fiscal metrics"},"content":{"rendered":"

Africa-Press<\/a> – South-Africa<\/a>. <\/strong><\/span>JOHANNESBURG – FINANCE Minister Tito Mboweni this week begins a huge task to stave off further credit ratings downgrades while boosting confidence in the economy that has been distraught with rising borrowings.<\/p>\n

On Wednesday, Mboweni revealed the extent of the government\u2019s borrowing due to the pandemic, support for struggling state-owned enterprises (SOEs) and finding funding the country\u2019s Covid-19 vaccination programme.<\/p>\n

In October, he said that contingent liabilities were expected to exceed R1 trillion by 2023 due to government guarantees to SOEs.<\/p>\n

The government has increased its borrowing substantially partly to fund current expenditure such as civil servants\u2019 remuneration increases above inflation.<\/p>\n

But economists have warned debt levels remained a downward risk to the fiscus that could push the economy deeper into junk status.<\/p>\n

Liberty\u2019s consumer economist, Tendani Mantshimuli, said the government\u2019s debt levels would not come down steadily over time as projected in the 2020 Budget.<\/p>\n

\u201cWe now know that this will not be the case.<\/p>\n

\u201cThe minister is more likely to announce even higher debt levels than were even projected during the special Budget in October last year,\u201d Mantshimuli said.<\/p>\n

\u201cWith high debt levels comes higher debt-servicing costs which further reduces revenue that could be spent elsewhere.\u201d<\/p>\n

The national debt is forecast to reach R3.56 trillion, or 65.6 percent as a share of gross domestic product (GDP) by the end of 2020\/21, peaking at 93 percent of GDP in 2023\/24.<\/p>\n

The fiscal deficit is expected to rise from 6.4 percent of GDP to 15.7 percent of GDP this financial year.<\/p>\n

Investec\u2019s chief economist Annabel Bishop warned that the country\u2019s borrowing levels were already approaching bankruptcy levels.<\/p>\n

Bishop said South Africa remained on negative outlooks.<\/p>\n

\u201cSouth Africa is at risk of credit rating downgrades this year, as it is on a negative outlook from both Moody\u2019s and Fitch, while its economic growth trajectory will likely be weak, and it has been slow in implementing reforms,\u201d Bishop said.<\/p>\n

Bishop said the weak economic growth trajectory and slow pace in implementing reforms was putting South Africa at risk of credit rating downgrades this year.<\/p>\n

\u201cManageable debt levels are the key to fiscal sustainability for South Africa.<\/p>\n

In November, ratings agencies Moody\u2019s and Fitch both cut South Africa\u2019s<\/p>\n

foreign and local-currency ratings two and three levels below investment grade respectively, with the outlook remaining negative.<\/p>\n

Earlier this month, Moody\u2019s published a note warning that it would likely downgrade South Africa further if its debt burden continued to grow.<\/p>\n

PwC chief economist Lullu Krugel said that the Budget was unlikely to depart from previous financial commitments made to SOEs. Krugel said it was likely that political pressures will prevent the National Treasury from reducing the quantum of expenditure allocated to the bailout of SOEs.<\/p>\n

\u201cGiven the high and rising levels of the government debt, it is possible that ratings agencies are not satisfied by Budget 2021.\u201d<\/p>\n

BUSINESS REPORT<\/b><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. JOHANNESBURG – FINANCE Minister Tito Mboweni this week begins a huge task to stave off further credit ratings downgrades while boosting confidence in the economy that has been distraught with rising borrowings. On Wednesday, Mboweni revealed the extent of the government\u2019s borrowing due to the pandemic, support for struggling state-owned enterprises (SOEs) […]<\/p>\n","protected":false},"author":84,"featured_media":4888,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5,8],"tags":[274,315,275],"class_list":["post-4889","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","category-homepage-english","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nMboweni out to juggle the country\u2019s fiscal metrics - South Africa<\/title>\n<meta name=\"description\" content=\"JOHANNESBURG - FINANCE Minister Tito Mboweni this week begins a huge task to stave off further credit ratings downgrades ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/mboweni-out-to-juggle-the-countrys-fiscal-metrics\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mboweni out to juggle the country\u2019s fiscal metrics\" \/>\n<meta property=\"og:description\" content=\"JOHANNESBURG - 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