Uncategorized 24.10.2013 06:00 am

Debt stability a future goal

Image courtesy Chance Agrella/Freerangestock.com

Image courtesy Chance Agrella/Freerangestock.com

National government net debt is projected to reach 39,3% of gross domestic product (GDP) in 2013/14 and to increase steadily to 43,9% by 2016/17.

In its Medium Term Budget Policy Statement, National Treasury says debt is expected to stabilise over the longer term, but later than previously anticipated and at a higher level relative to GDP.

The forecast shows net debt stabilising at 44% of GDP in 2017/18. However, it believes the debt-to-GDP ratio is sustainable. Government’s debt management strategy will focus on keeping the cost of funding as low as possible and to ensure continuous access to international capital markets and bond market development,

The main budget net borrowing requirement is projected to increase from R168.5 bn in 2013/14 to R183.9 bn in 2014/15, before declining to R164.9 bn in 016/17.

“The weaker rand exchange rate increased the value of foreign-denominated debt and inflation has had the same effect on inflation-linked debt. Deterioration in the economic growth outlook has increased the debt-to-GDP ratio.






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