South African Government Debt to GDP was reported higher at 53.1%, for 2017
2018 has proved to be another volatile year for the Rand, due to favourable political tailwinds after the ANC elected a new leader and subsequent concerns over South Africa’s fiscal state. South Africa may have a new President, however, corruption scandals continue to be reported daily placing a cap on South Africa’s potential for foreign investment. Managing the Government Debt to GDP ratio remains one of the biggest hurdles South Africa faces in order to create jobs and grow the economy. Government Debt was raised numerous times in the State of the Nation Address (SONA) debate in Parliament with MP’s pointing to wasteful expenditure and poorly run SOE’s as key contributors to rising debt. Just this week, irregular spending reported at Eskom swelled to R19.6 billion Government Debt to GDP is reported on an annual basis and was reported at 51.7% for 2016 & 53.1% in 2017. As you can see by the below chart, the ratio has been on the rise since the 2008 Financial Crisis. In 2017, growth in the GDP was overshadowed by faster growth in Government Debt, ultimately leading to a higher Debt to GDP ratio for the year. Not a good sign for the SA economy, leaving Cyril with his work cut out for him in the months to come. According to Floyd Shivambu and confirmed by AfricaCheck, South Africa’s Debt currently sits at R2.3 trillion Rand.
— Africa Check (@AfricaCheck) February 20, 2018
We will be providing a detailed review of both reports in the weeks to follow. If you would like to sign up to The Forecaster, our monthly Rand Bulletin, please do so via the contact form at the bottom of the page. For more information and insight into key South African Indicators, please feel free to browse our Economic Data Page.