Deficit Seen Widest Since WWI Weighs on South African Bonds
- Yields have climbed ahead of Mboweni’s adjusted budget
- Fiscal shortfall could be as much as 15%, Investec estimates
This article is for subscribers only.
South African government bond yields are climbing ahead of this week’s adjusted budget as investors contemplate what could be the widest fiscal deficit since World War I.
The country is already borrowing at a rate of more than 1 billion rand ($57 million) a day, but even that may not be enough to plug a hole in government finances of as much as 15% of gross domestic product, according to Investec Ltd. Debt levels will exceed 100% of gross domestic product in 2025 and rise to almost 114% before the end of the decade, according to government projections.