SA must quadruple GDP growth to escape 'dreadful' fiscal position - Coronation

Unless South Africa's economy grows almost four times faster than it currently is, its government will be unable to escape the fiscal hole it has dug for itself.

That's the view of Coronation Fund Managers portfolio manager Charles de Kock, who spoke at the Investment Forum 2024 in Sandton on Tuesday. De Kock said government's poor finances are why the Coronation Balanced Fund has only a 13% allocation to South African bonds, with about half of that allocated to corporate debt.

"The SA government's fiscal affairs are in dreadful shape and unless we can growth the economy at least 2% - and that is the minimum, it should be more than that, or you curb government spending meaningfully – they're not going to get out of this hole," De Kock said during a panel discussion. "You are getting a reasonable yield, which I think is okay compensation for the risk you are taking, but it's only okay. I don't think it's a big dripping roast at all."