South Africa Sees Main Surplus as Key Fiscal Anchor

In lieu of an expenditure cap, South Africa has altered its emphasis to make a primary budget surplus its most important fiscal anchor.

According to Edgar Sishi, acting head of the National Treasury budget office, a primary surplus that removes interest costs indicates that the government will raise money from the economy needed to service debt and that the policy stance on expenditure and debt is not defined by ‘fiscal looseness.’

According to Bloomberg, the move is part of Treasury officials’ wider shift in thought and follows signals first given in the medium-term budget for 2019.

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