Budget 2021: Debt service will rise to R338.6bn in 2023/24
By Helmo Preuss
PRETORIA - The Treasury has forecast that debt service costs will rise to R338.6 billion in 2023/24 from R162.6 billion in 2017/18.
It was to counter a similar rise in debt service costs in the 1990 to 1994 period that the government in the 1996 to 2007 period made fiscal austerity a key policy platform, so that they could reduce outstanding debt and use the saving in debt service costs to fund other services.
To reduce debt service costs, Treasury aim to lower growth in the wage bill and the share of spending on wages, while sustaining real spending increases on capital payments, specifically for buildings and other fixed structures as infrastructure investment is a key part of increasing economic growth in future years.
This means that the consolidated budget deficit, which is estimated at 14.0 percent of GDP in 2020/21, narrows to 6.3 percent by 2023/24 with government aiming to achieve a primary surplus, meaning that total revenue will exceed non-interest expenditure, in 2024/25.