SA’s government debt profile deteriorates while US interest rates may have peaked

SA’s Medium-Term Budget Policy Statement (MTBPS), released last week, showed a tax revenue shortfall of about R56 billion, as expected. It also showed government overspending of about R29 billion, which will be clawed back through cuts in departmental and provincial budgets. Fiscal discipline and stronger economic growth will be needed to improve government finances. In the US, unemployment has ticked higher and wage growth has edged lower, easing concerns over the need for higher interest rates to curb inflationary pressures and lifting market sentiment.