However, the Medium Term Budget Policy Statement of October 2017 not only saw a meaningful upward revision to deficit estimates for the current year, but also did not project a reduction in that deficit in the outer years. Consequently, the debt-to-GDP ratio is now projected to keep rising throughout the period, approaching 60% by 2020/21.
This mixture of weak growth and rising debt – the two concerns repeatedly flagged by ratings agencies – suggests that South Africa must increasingly be wary of possible further downgrades to its sovereign ratings.