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GTAP Resources: Resource Display

GTAP Resource #4709

"Real Effects of Public Debt on National Development"
by Chitiga, Margaret, Ramos Mabugu and Helene Maisonnave


Abstract
Introduction and motivation
South Africa’s National Development Plan (NDP) Vision for 2030 clearly articulates that fiscal policy would be expected to play a central role in influencing the pace at which the economy will grow and its capacity to deal with the key challenges that will arise over the next several decades. Domestic policy challenges include poor education and health outcomes, rapid urbanisation, environmental hazards, infrastructure capacity weaknesses coupled with inadequate investment levels and household and spatial inequalities. External challenges include immigration and an uncertain global economic environment. Fiscal policy will not only affect macroeconomic stability, but also whether the country can transition to a higher economic growth path, reduce its high poverty rate, and address its substantial income, asset, and regional inequalities.
It is now some five years since the global economic and financial crisis of 2008. The crisis led to prolonged and previously unforeseen fiscal deterioration that has left South Africa with serious challenges. The height of the crisis is now well past, but its aftermath remains pervasive, with South Africa still some way from restoring strong and sustainable economic growth rates per annum, as required by the NDP. These developments have directly affected the level and composition of public debt. In recent years South Africa’s debt has increased considerably. Debt management decisions have begun to play a predominant role within government’s fiscal strategies. As debt grows and its role as a major instrument for financing government needs is enhanced, debt management decisions become very important as part of a fiscal strategy. Considering that public debt management has fundamental effects on public finances, any attempt to determine the country’s financing scheme in the medium term should involve adequate public debt management as well as a medium-term debt strategy.
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Resource Details (Export Citation) GTAP Keywords
Category: 2015 Conference Paper
Status: Published
By/In: Presented at the 18th Annual Conference on Global Economic Analysis, Melbourne, Australia
Date: 2014
Version:
Created: Chitiga, M. (4/14/2015)
Updated: Chitiga, M. (6/10/2015)
Visits: 1,181
- Economic development


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