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South Africa’s debt woes tie policymakers’ hands

South Africa’s emergency budget highlighted that the dire state of the public finances is limiting the scope for fiscal support this year and attention is already focused on dealing with the legacy of higher debt. Austerity will be the first port of call, but this will hold back the recovery and it’s hard to see it being politically palatable over any length of time. The debt burden looks set to rise on an alarming trajectory.

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