The sustainability of South African fiscal policy

Philippe Burger

No wp-2024-59, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: The public-debt-to-GDP ratio in South Africa increased from 26 per cent in the 2008/09 fiscal year to 73.9 per cent in 2023/24, raising fears that fiscal policy is not sustainable. This raises the question: did the government take steps to arrest the increase in the debt-to-GDP ratio and regain fiscal sustainability, and if so, why did they fail? Establishing fiscal sustainability can be done directly or indirectly. Doing it directly entails the government increasing the primary balance in reaction to higher debt levels. Hence, this paper presents a fiscal reaction function.

Keywords: Public debt; Budget deficits; Fiscal sustainability; Investments; Fiscal policy (search for similar items in EconPapers)
Date: 2024
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