South African Finance Minister Tito Mboweni ruled out an IMF adjustment programme this week and said the country didn’t need budget support, despite acknowledging that there would be a deep recession this year because of the global COVID-19 pandemic.
Mboweni’s comments came hours after the central bank unexpectedly cut its main lending rate by 100 basis points to 4.25% and predicted a 6.1% contraction in gross domestic product (GDP) this year.
Africa’s most industrialised nation was already in recession before it recorded its first case of the new coronavirus in March. Investors are anxious about how it will fund a budget deficit many analysts expect to exceed 10% of GDP this year.
The country has the most confirmed coronavirus cases in sub-Saharan Africa, at 2,415, and that number is expected to rise significantly as more tests are conducted in far-flung rural areas and overcrowded informal settlements.
Addressing reporters on a
You’ve reached your free article limit
Subscribe to enjoy unlimited access to trusted journalism. Start your free trial today.
Start your FREE trial nowNeed help? molokom@insideeducation.co.za
