South Africa "no way near debt distress" – cenbank governor

JOHANNESBURG, March 12 (Reuters) – South Africa is “no way near debt distress”, central bank governor Lesetja Kganyago said on Friday, despite the country’s debt-to-gdp ratio nearing the 100% mark seen as a red line for investors and credit rating agencies.

Kganyago, speaking live online during an African Development Bank panel, did however warn of the dangers of implementing fiscal austerity during a prolonged contraction of gross domestic product.

“Debt is an outcome of your fiscal policy stance, so for as long you are running a fiscal policy deficit you will have debt,” Kganyago said. “(But) it could actually be self-defeating if you try to implement fiscal consolidation during a growth crisis.”

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