Gross loan debt set to rise to 92.9% of GDP as SA plugs holes #MTBPS

SA will borrow from multilateral institutions and draw on sterilisation deposits it holds with the SARB to help finance a budget deficit.
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National Treasury released its 2020 Medium Term Budget Policy Statement speech on Wednesday. According to Treasury, the impact of Covid-19 has resulted in steep economic declines and increased public finance expenditure. Amid a global contraction not seen since the 1930s, National Treasury's focus is on securing economic recovery post-Covid-19. The 2020 Medium Term Budget Policy Statement (MTBPS) therefore prioritises economic recovery and fiscal consolidation in the medium-term. It goes without saying that there were a few surprising twists (yet more money allocated to SAA), but otherwise, it seems that little has changed since the budget allocated in June. – Claire Badenhorst

Faced with surging debt, South Africa sticks to borrowing plans

By Mike Cohen*

(Bloomberg) – South African Finance Minister Tito Mboweni steered clear of increasing borrowing in his medium-term budget, instead announcing spending cuts to offset falling tax revenue.

The National Treasury's financing plan unveiled Wednesday was little changed from the special adjustments budget announced in June to take account of the devastation wrought by the coronavirus.

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