PARLIAMENT – The cost of servicing government debt continues to rise and will exceed estimates forecast in February by several billion rand over the next three years, the National Treasury's Medium-term Budget Policy Statement indicated on Wednesday.
"The cost of servicing government debt is expected to exceed 2018 budget estimates by R1 billion in 2018/19, R4.9 billion in 2019/20 and R7.9 billlion in 2020/21," the document, tabled in Parliament by Finance Minister Tito Mboweni, said.
It attributed the increase in debt service costs to "a larger main budget deficit, currency depreciation and higher interest rates".
Around 15.1 percent of the government's main budget will be used on debt service costs by 2021/22, increasing from the 13.9 percent forecast for this financial year.
According to the MTBPS statement, education is fastest growing area of expenditure after debt service. Health is also an area that has fast-growing expenditure.