Next week expects a crucial budget that could decide the trajectory of the post Covid-19 economy. Finance Minister Tito Mboweni will deliver his emergency budget on Wednesday the 24th. Meanwhile there’s a budget issue. The South African Reserve Bank is to resist the call from government to finance it growing budget deficit with aggressive quantitative easing. According to Governor Lesetja Kganyago it could add even more strain on the National Treasury and the large-scale quantitative easing could bankrupt the central bank. Maarten Ackerman, Chief Economist for Citadel joins CNBC Africa for more.
The COVID-19 lock-down is expected to cost South Africa’s economy over one trillion rand in lost output. One of the ways to fund South Africa’s recovery could be for the Reserve Bank to follow its peers globally and print money – a move, which up to now, the bank has been reluctant to do. That’s the view of Professor Brian Kantor, Chief Strategist & Economist at Investec Wealth & Investment.