South Africa vulnerable to any sharp rise in global rates, World Bank warns

A quicker and sharper-than-expected normalisation in interest rates in the US could trigger a reversal in capital flows to South Africa, the World Bank’s latest ‘Africa’s Pulse’ warns, adding that any sharp increase in global interest rates could also complicate debt dynamics for sub-Saharan Africa as a whole. The publication shows that government debt in sub-Saharan Africa remains elevated, with median government debt expected to be around 50% of gross domestic product (GDP) in 2017, more than 15 percentage points above the level in 2013. “In South Africa, government debt in 2017 is expected to rise two percentage points to about 53% of GDP.”