Debt rises to 38.2% – highest since ’80s

SOUTH Africa’s outstanding foreign debt rose from 35.4% of gross domestic product (GDP) at the end of June last year to 38.2% at the end of September.

It was the highest level since the mid-1980s‚ the Reserve Bank reported yesterday as it released its quarterly bulletin.

Its economic reviews and statistics head, Johan van den Heever, said although these levels were lower than in other countries‚ it meant the government could in future pay more in interest.

Paying more interest could in turn negatively affect spending on more laudable programmes such as education.

In monetary terms‚ total outstanding external debt increased from $130.4-billion at the end of June to $136.6-billion at the end of September as both foreign-currency- and rand-denominated debt rose over the period.

The government increased spending following the 2008-09 recession to boost the economy and is rebuilding its fiscal space by capping spending growth.

South Africa’s foreign debt rose from $72.80-billion at the end of the second quarter of last year to $76-billion at the end of the third quarter. – BDpro


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