8 things feeding South Africa’s massive debt crisis, according to economists

[BusinessTech]

8 things feeding South Africa’s massive debt crisis, according to economists

Economists at the Institute of International Finance (IIF) have warned that South Africa's debt situation is becoming dire, and if the government takes on R150 billion worth of power utility Eskom's debt - as is currently being discussed - could hit 90% of GDP in "just a few years".

 

[maumau]

What does this mean:
"including persistently large external imbalances and the possibility of sizable non-resident portfolio outflows"

Are they talking about people leaving ZA and taking their funds with them? Or just investing offshore?

 

[Neuk_]

What I find interesting is that we are being warned about hitting 90% Debt/GDP while Japan is sitting at over 200% Debt/GDP.

 

[JayM]

What does this mean:
"including persistently large external imbalances and the possibility of sizable non-resident portfolio outflows"

Are they talking about people leaving ZA and taking their funds with them? Or just investing offshore?

Foreign investors pulling out their money.

 

[Scooby_Doo]

What I find interesting is that we are being warned about hitting 90% Debt/GDP while Japan is sitting at over 200% Debt/GDP.

Japan's bond rates are negative. People are paying Japan to lend Japan money. South African bonds are running between 8% and 9%.

 

[JayM]

What I find interesting is that we are being warned about hitting 90% Debt/GDP while Japan is sitting at over 200% Debt/GDP.

Japan can borrow at around 0.1%.

 

[The_Librarian]

...and Govt will still do nothing. Ostrich syndrome.

 

[maumau]

Foreign investors pulling out their money.

Thanks @JayM.

 

[Johnatan56]

Japan can borrow at around 0.1%.

You mean -0.1%.
And most of Japan's debt (upwards of 90%) is owed to its own citizens/internal banks, so not an issue.

 

[Gaz{M}]

Debt to GDP isn't the problem, like people have said, the finance terms are important that are attached to that debt.

USA is over $22 Trillion (105% Debt to GDP), but at such a low interest of 2.5%.

South Africa debt is at +-10% but our economy is growing at <1%. Can you see the problem now?