Great care needed for SA to avoid sovereign debt crisis

21 June 2020 - 00:00 By Sunday Times Editorial

As far as black swan events go, the special adjustment budget to be tabled this week is indeed one of those rarities. The damage to SA's economy brought about by the Covid-19 pandemic is still only starting to be felt, with a string of companies starting to tally the costs by taking a knife to jobs and mulling shutting shop altogether. To help soften the blow, the government's main response thus far has been its R500bn stimulus package. But as evidence is starting to show, this has arguably had limited impact.

That further stimulus is needed to help shore up what's left of the economy is not in question. The real trouble is that with tax revenue estimated to come in R300bn short from February's projections, little - if any - scope for further tax hikes, and the near ceasing of the economy, Tito Mboweni will have little room to move...

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