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South Africa`S Fiscal Outlook Amidst Covid-19 Pandemic

Author

Listed:
  • Ephrem Habtemichael Redda

    (North-West University)

Abstract

This study seeks to provide an overview of South Africa?s fiscal outlook amidst the Covid-19 pandemic. To achieve this, the study will explicate the discrepancies between general government revenue and expenditure, and between government debt and budget deficit in light of South Africa?s low economic growth. The study utilised publicly available secondary data (2000-2020), and it employed a descriptive research design and quantitative research method. The results indicate that the biggest discrepancy between government revenue and expenditure yet recorded is in 2020, evidenced by the 12.25% budget deficit. The outlook and expected recovery do not appear positive, and it may last for years, as is the case with crises of this magnitude. The results further demonstrate that even before the pandemic in 2019, the debt-to-GDP ratio was beyond the 60% threshold, and is already displaying unfavourable trends with the pandemic?s effects beginning in 2020. For fiscal sustainability, ensuring the debt-to-GDP ratio is in check over the medium term by limiting expenditures and stimulating investment should be considered.

Suggested Citation

  • Ephrem Habtemichael Redda, 2021. "South Africa`S Fiscal Outlook Amidst Covid-19 Pandemic," Proceedings of Business and Management Conferences 12613397, International Institute of Social and Economic Sciences.
    • Handle: RePEc:sek:ibmpro:12613397
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    File URL: https://iises.net/proceedings/12th-business-management-conference-prague/table-of-content/detail?cid=127&iid=010&rid=13397
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    References listed on IDEAS

    as
    1. World Bank, 2020. "Global Economic Prospects, January 2020," World Bank Publications - Books, The World Bank Group, number 33044, December.
    2. Zsolt Darvas & György Szapáry, 2008. "Euro Area Enlargement and Euro Adoption Strategies," European Economy - Economic Papers 2008 - 2015 304, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    3. Ruthira Naraidoo & Leroi Raputsoane, 2015. "Debt Sustainability and Financial Crises in South Africa," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(1), pages 224-233, January.
    4. World Bank, 2020. "Global Economic Prospects, June 2020," World Bank Publications - Books, The World Bank Group, number 33748, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Fiscal outlook; debt-to-GDP ratio; budget deficit; tax revenue; expenditure;
    All these keywords.

    JEL classification:

    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications

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