S&P Global Ratings has warned that South Africa’s R500billion coronavirus stimulus package could widen the country’s debt burden to unsustainable levels and weaken an already depressed economy. busrep lockdown Covid19
JOHANNESBURG - S&P Global Ratings has warned that South Africa’s R500billion coronavirus stimulus package could widen the country’s debt burden to unsustainable levels and weaken an already depressed economy.
S&P analysts led by London-based Ravi Bhatia said in a report that South Africa’s fiscal deficit could widen to an all-time high of 13.3percent of gross domestic product this year. S&P on Friday said the economy would contract by 4.5percent this year due to lockdown restrictions, weak external demand conditions and tighter credit conditions.
The government will set aside at least R10bn further to rescue cash-strapped South African Airways while also providing financial support to the Land and Agricultural Development Bank after it defaulted on its domestic bond notes totalling about R50bn. A further R130bn would be borrowed from international financial institutions, over and above R230bn of additional spending on healthcare and municipalities.
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