February 26, 2020 / 12:05 PM / a month ago

South Africa's budget deficit seen at 18-year high next fiscal year - Treasury

CAPE TOWN, Feb 26 (Reuters) - South Africa’s budget deficit is projected to widen to an 18-year high next fiscal year as weak economic growth and bailouts to state companies strain public finances, the National Treasury said on Wednesday.

The budget deficit was likely to reach 6.8% of gross domestic product (GDP) in the 2020/21 fiscal year, which begins in April, compared with a previous estimate of 6.5%, the Treasury’s 2020 budget showed.

The projected deficit would be the highest since the Treasury started producing the consolidated budget in 2002/03.

The Treasury warned that debt was unlikely to stabilise over the next three years, with gross loan debt peaking at 71.6% of GDP in fiscal year 2022/23. (Reporting by Olivia Kumwenda-Mtambo, Mfuneko Toyana, Wendell Roelf Editing by Alexander Winning)

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