South Africa’s Finance Minister Tito Mboweni today fleshed out harsh austerity plans for the next few fiscal years. But the emphasis on spending cuts, including a three-year public wage freeze, will be politically difficult to push through. The debt ratio, which even under the current plans is not expected to peak until 2025/26, is likely to surprise on the upside and the government will eventually have to resort to financial repression policies to keep borrowing costs in check and debt sustainable.
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