In his Medium-Term Budget Policy Statement tabled in Parliament, the Finance Minister said debt was expected to increase from 35.7% of GDP this year, to 39.2% of GDP in 2015/2016
Government's debt will increase to about R1.7 trillion over the next three years, then start dropping, Finance Minister Pravin Gordhan said on Thursday.
In his Medium-Term Budget Policy Statement tabled in Parliament, he said debt was expected to increase from 35.7% of GDP this year, to 39.2% of GDP in 2015/2016.
According to the document, government's total net loan debt will be R1.35 trillion next year; R1.54 trillion in 2014/15; and, R1.71 trillion in 2015/16.
Gordhan said debt was then expected to decline in subsequent years.
"Arresting the growth of debt will require a significant reduction in the primary deficit — the amount by which non-interest spending exceeds revenue."
The primary deficit would be narrowed by slower spending growth, and a recovery in revenue from 2.1% of GDP to 0.4 percent between now and 2015/16.
Gordhan said debt service costs would strain government's pocket, and grow at an annual average of 8.9% over the next three years.
"In the outer year (2015/16), it will cost government R114.8 billion to service the debt, draining resources that could be spent on productive investment and social priorities," he said.
Government debt will rise to R1.7 trillion
In his Medium-Term Budget Policy Statement tabled in Parliament, the Finance Minister said debt was expected to increase from 35.7% of GDP this year, to 39.2% of GDP in 2015/2016
Government's debt will increase to about R1.7 trillion over the next three years, then start dropping, Finance Minister Pravin Gordhan said on Thursday.
In his Medium-Term Budget Policy Statement tabled in Parliament, he said debt was expected to increase from 35.7% of GDP this year, to 39.2% of GDP in 2015/2016.
According to the document, government's total net loan debt will be R1.35 trillion next year; R1.54 trillion in 2014/15; and, R1.71 trillion in 2015/16.
Gordhan said debt was then expected to decline in subsequent years.
"Arresting the growth of debt will require a significant reduction in the primary deficit — the amount by which non-interest spending exceeds revenue."
The primary deficit would be narrowed by slower spending growth, and a recovery in revenue from 2.1% of GDP to 0.4 percent between now and 2015/16.
Gordhan said debt service costs would strain government's pocket, and grow at an annual average of 8.9% over the next three years.
"In the outer year (2015/16), it will cost government R114.8 billion to service the debt, draining resources that could be spent on productive investment and social priorities," he said.
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