WEDNESDAY, 11.30AM
STATE debt in SA, which has hovered around 55% of gross domestic product for the past few years, jumped to 57,8% in the second quarter from the first quarter’s 55,8%. The increasing state debt level puts SA perilously close to the “debt trap” of 60% of GDP, where government’s are forced into increasing borrowing to service existing debt.
The worsened second-quarter debt figures reflect government’s taking over of the debt of the former homelands and Namibia.
The Reserve Bank’s latest quarterly bulletin shows state debt in the second quarter rose R22,7-billion to R333,3-billion. This figure includes R3,3-billion in debt from the former homelands, covered by government bond issues. Government also took over Namibian debt of R1,1-billion and interest of R131-million.
Government’s growth, employment and redistribution programme aims to bring new government borrowing this year down to 4% of GDP and 3% in subsequent years in a bid to keep overall government debt short of the 60% debt-to-GDP ratio.