In many countries, including ours, the high levels of NPLs – despite the prompting, the targeted inspections and the prudential interventions by the supervisory authorities – were among the main causes of banking crises in the last few years. The effect of this approach on banks’ 8  balance sheets may not prove trivial over the short term, but it is manageable overall.
The further decline in the borrowing requirement of the public sector in the past fiscal year can be attributed to substantial improvements in the financial position of the national government, provincial governments and the non-financial public enterprises and corporations. A decline in investment spending by public enterprises and corporations was responsible for approximately 25% of the reduction in the public-sector borrowing requirement.