Macro Notes – South Africa: In Need of IMF Support

The COVID-19-induced global recession, together with the economic effects of steps taken by the South African government to address the pandemic domestically, has made a challenging situation increasingly untenable. Persistently low growth and rising budgetary support for state-owned enterprises had led to a deteriorating debt sustainability outlook prior to the COVID-19 shock, which South Africa, as a result, entered in an already weak position.