Scope currently forecasts that net interest payments will rise from 18.4% of revenues last year to 25% by 2029. Debt and interest forecasts are high by emerging-market standards. Any adverse shock to these assumptions may call into question the sustainability of debt, risking a sudden reversal of capital inflows.
Budgetary challenges are concerning as spending increases are already entrenched for the coming years, given effects of higher-for-longer rates (10-year rand yields having stayed elevated at around 11%), outstanding social-spending requirements (such as an extension of the Social Relief of Distress basic income), wage increases,…
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