Investors reassured but medium term risks loom for SA economy – Thea Fourie, S&P Global Market Intelligence

Finance Minister Enoch Godogwana has described South Africa’s public finances as significantly weaker in his mid-term budget emphasising that measures to stabilise public finances and reform the economy to generate higher growth are essential. Markets reactions were generally favourable with the rand strengthening. Thea Fourie from S&P Global Market Intelligence said in an interview with Biznews that lower expenditure was a welcome surprise and that the investor community appeared to be happy with Mr Godongwana’s projections, but said concerns lingered about the persistent rise in the public sector debt-to-GDP ratio. Medium term risks remained on the horizon, she said. Transnet and Eskom, Fourie warned could be bad news for the debt trajectory. These risks she said raised concerns about the government’s ability to achieve its objectives. - Linda van Tilburg