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South Africa's debt sustainability: A multi-factor approach
An increasing debt-GDP ratio, slow growth, high debt costs and declining credit ratings call into question the sustainability of South Africa's public debt. However, some commentators have drawn on Modern Monetary Theory in arguing that increasing debt can be tolerated for states that have a level o...
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| Format: | Thesis |
| Language: | English |
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School of Economics
2023
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| _version_ | 1867613282890678272 |
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| access_status_str | Open Access |
| author | Begbie, Lyle |
| author2 | Donaldson, Andrew |
| author_browse | Begbie, Lyle Donaldson, Andrew |
| author_facet | Donaldson, Andrew Begbie, Lyle |
| author_sort | Begbie, Lyle |
| collection | Thesis |
| description | An increasing debt-GDP ratio, slow growth, high debt costs and declining credit ratings call into question the sustainability of South Africa's public debt. However, some commentators have drawn on Modern Monetary Theory in arguing that increasing debt can be tolerated for states that have a level of monetary sovereignty. This paper concludes that South Africa has a high degree of monetary sovereignty due to factors including its flexible exchange rate, independent and credible central bank, high level of financial development and private wealth and limited liquidity risk. However, the scope for increasing debt is not unlimited, the risks associated with rising inflation cannot be ignored and the national treasury's fiscal consolidation plan should not be abandoned. South Africa's comparatively strong financial institutions and persistently low global real interest rates allow the fiscal consolidation programme to be implemented gradually without undue disruption to the growth recovery, while avoiding the risk of a debt crisis, hyperinflation, and a sovereign default. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/37062 |
| institution | University of Cape Town (South Africa) |
| language | eng |
| last_indexed | 2026-06-10T12:33:40.116Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2023 |
| publishDateRange | 2023 |
| publishDateSort | 2023 |
| publisher | School of Economics |
| publisherStr | School of Economics |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/37062 South Africa's debt sustainability: A multi-factor approach Begbie, Lyle Donaldson, Andrew Economics An increasing debt-GDP ratio, slow growth, high debt costs and declining credit ratings call into question the sustainability of South Africa's public debt. However, some commentators have drawn on Modern Monetary Theory in arguing that increasing debt can be tolerated for states that have a level of monetary sovereignty. This paper concludes that South Africa has a high degree of monetary sovereignty due to factors including its flexible exchange rate, independent and credible central bank, high level of financial development and private wealth and limited liquidity risk. However, the scope for increasing debt is not unlimited, the risks associated with rising inflation cannot be ignored and the national treasury's fiscal consolidation plan should not be abandoned. South Africa's comparatively strong financial institutions and persistently low global real interest rates allow the fiscal consolidation programme to be implemented gradually without undue disruption to the growth recovery, while avoiding the risk of a debt crisis, hyperinflation, and a sovereign default. 2023-02-23T13:42:37Z 2023-02-23T13:42:37Z 2022 2023-02-20T12:17:10Z Master Thesis Masters MCom http://hdl.handle.net/11427/37062 eng application/pdf School of Economics Faculty of Commerce |
| spellingShingle | Economics Begbie, Lyle South Africa's debt sustainability: A multi-factor approach |
| thesis_degree_str | Master's |
| title | South Africa's debt sustainability: A multi-factor approach |
| title_full | South Africa's debt sustainability: A multi-factor approach |
| title_fullStr | South Africa's debt sustainability: A multi-factor approach |
| title_full_unstemmed | South Africa's debt sustainability: A multi-factor approach |
| title_short | South Africa's debt sustainability: A multi-factor approach |
| title_sort | south africa s debt sustainability a multi factor approach |
| topic | Economics |
| url | http://hdl.handle.net/11427/37062 |
| work_keys_str_mv | AT begbielyle southafricasdebtsustainabilityamultifactorapproach |