• News
  • Sport
  • TV
  • Radio
  • Education
  • TV Licences
  • Contact Us
  • SOUTH AFRICA
  • POLITICS
  • BUSINESS
  • SPORT
  • AFRICA
  • WORLD
  • FEATURES
  • OPINION
No Result
View All Result
1
Home Business

Economists concerned about SA debt to GDP

28 May 2018, 7:28 PM  |
Tshepo Mongoai Tshepo Mongoai |  @SABCNews

Image: SABC

Economists have warned that the country’s debt to Gross Domestic Product could be pushed to unsustainable levels if requests for bailout by State Owned Enterprises are given a green light. Government’s debt as a percentage of GDP has been sitting at around dangerous levels above 50 percent.

Recent measures to bring debt below 45 percent have been unsuccessful as billions of rands are pumped into poorly managed State-Owned Enterprises. Government’s failure to tighten its purse strings amid dwindling revenue collection is now threatening the fiscus.

Corruption and wasteful expenditure are hampering efforts to derive value from the limited government resources.

To avoid embarrassment, government is often forced to divert resources to sustain operations in struggling SOE’s affected by corruption and maladministration.

This has created perception that the state will always come to the rescue of ailing SOEs under any circumstances. But now government itself is also running out cash to bail out struggling State-Owned Enterprises.

Government had to borrow billions rands in order to keep services of many ailing state companies like SAA and Eskom above water.

It is now becoming clearer that government can no longer continue on this path without threatening key spending priorities including education and social welfare.

Last week Standard & Poor’s took a decision to keep its credit rating of the country at Junk Status, citing rising debt levels among others.

“The debt to GDP is about 45 percent or so, if you add all the guarantees and bailouts that SOE’s still need that number is up to unsustainable levels,” says Investment Analyst Patrick Mathidi.

However the withdrawal of bailouts alone will not help improve the country’s difficult fiscal position. The economy must grow and debt levels must stabilise. These may support a case of a better credit review by the three rating agencies.

Share article
Tags: GDPSOEsEskomSAAEconomy
Previous Post

SA’s rand rises after S&P leaves ratings unchanged

Next Post

SA Express employees in limbo after grounding of planes

Related Posts

Workers hand over memorandum to Seriti Klipspruit Colliery amid retrenchment

22 September 2023, 5:15 PM
Chickens are seen at a poultry farm outside Klerksdorp in the North West province, South Africa, August 15, 2018. Picture taken August 15, 2018.

Avian flu outbreak expected to drive up egg, chicken prices

22 September 2023, 5:00 PM
A person holding South African notes.

Sigh of relief for indebted consumers as repo rate remains unchanged

22 September 2023, 8:09 AM
A taxi rank.

Cashless taxi service launched in Cape Town

21 September 2023, 8:01 PM

INFOGRAPHIC | Changes in repo rate since 2022

21 September 2023, 6:49 PM
[FILE IMAGE] Taxis wait to receive passengers at a taxi rank.

eThekwini municipality, Taxi association seek to resolve uMhlanga Rocks rank dispute

21 September 2023, 5:25 PM
Next Post

SA Express employees in limbo after grounding of planes

Most Viewed

  • 24hrs
  • Week
  • Month
  • UPDATE: Public warned not to go to W Cape beaches as another spring tide expected
  • Spring high tide leaves trail of destruction along Garden Route
  • Concern over exclusion of foreign nationals from Road Accident Fund
  • “Motsoaledi’s ZEP leave for appeal has no prospects of success”
  • Congregants gather at Motse Maria Roman Catholic Mission in Limpopo
  • High waves and rough water conditions force beach closures in the Western Cape
  • Prince Mangosuthu Buthelezi to rest in the town he built and nurtured
  • NSPCA files criminal case against Julius Malema for alleged animal cruelty
  • Snow, heavy rainfall expected in parts of KZN: SAWS
  • Cold-front sweeps across SA bringing snow and chilly temperatures
  • Concern over exclusion of foreign nationals from Road Accident Fund
  • Limpopo multi-million rand water treatment, sewage project abandoned
  • R103 to be closed for demolition of Lynnfield Bridge on N3 towards Durban
  • AfriForum seeks Justice Keightley’s recusal in ‘Kill the Boer’ case
  • Gqeberha on high-alert following disruptive weather warnings

LATEST

Rain
  • South Africa

Gqeberha on high-alert following disruptive weather warnings


Israeli Prime Minister Benjamin Netanyahu
  • World

Israel on cusp of region-reshaping peace with Saudi Arabia, Netanyahu says


  • Politics

SA hopes to gain insights from China’s developmental agenda


  • South Africa

231 rhinos lost to poaching in SA this year, ongoing concerns on World Rhino Day


[FILE IMAGE] A fire destroys residential properties.
  • South Africa

ANC building up in flames in Port St Johns


  • South Africa

Joburg Water monitors troubled water systems closely


Weather

  • About the SABC
  • Contact Us
  • Jobs
  • Advertise
  • Disclaimer
  • Site Map

SABC © 2023

No Result
View All Result
  • SOUTH AFRICA
  • POLITICS
  • BUSINESS
  • SPORT
  • AFRICA
  • WORLD
  • FEATURES
  • OPINION

© 2023

Previous SA’s rand rises after S&P leaves ratings unchanged
Next SA Express employees in limbo after grounding of planes