The debt-to-GDP ratio, which compares the country’s sovereign debt to its economic output for any given year, is a number that is often overlooked by the general public. It is, however, a figure closely watched by rating agencies. For this reason, investigating its fluctuations makes for interesting reading and provides a good understanding on what to expect from the economy.
Since February 2017, South Africa has seen two budget speeches and two mid-term budget policy statements by three different ministers of finance. Each minister has taken a different approach in attempting to fix South Africa’s fiscal dilemma of low economic growth and a consistent tax revenue shortfall.
Tertius Troost, tax manager at Mazars, talks to Classic Business Breakfast with Moneyweb about why the debt-to-GDP ratio is closely watched by investors and what this means for the economy.