Ballooning govt debt to hinder lower inflation and rates, Reserve Bank warns

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Ballooning govt debt to hinder lower inflation and rates, Reserve Bank warns

South Africa’s strained public finances are hindering economic growth and a return to lower inflation, the country’s central bank cautioned on Tuesday.

"Reducing public debt to sustainable levels can deliver a triple dividend, namely lower cost of capital, reduced debt-service costs and lower inflation," the South African Reserve Bank said in its six-monthly Monetary Policy Review. The comments come ahead of a 1 November update on the nation’s budget outlook by Finance Minister Enoch Godongwana. He is expected to announce a large revenue shortfall and wider-than-expected budget deficit, aggravated by slower growth and weaker earnings from commodity exports.South Africans need to be in the know if we want to create a prosperous future. News24 has kept the country informed for 25 years, and we're about to enter a new chapter of fearless journalism.

 

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