S. African Debt Climbs as Gordhan Pledges Spending Curbs

South African Finance Minister Pravin Gordhan will struggle to keep government debt under control even as he pledges to stick to spending targets, Bloomberg reported. Gross debt will climb to 48 percent of gross domestic product in the year through March 2017 from an estimated 43 percent last year, the National Treasury said in its mid-term budget report released in Cape Town today. That’s mainly due to rising debt costs and tax receipts falling short of targets. While Gordhan, 64, is maintaining spending limits and curbing wage growth, allowing him to meet this year’s budget deficit target, borrowing will surge in the next three years. That raises risks for South Africa as credit rating companies such as Moody’s Investors Service warn of another downgrade and the U.S. Federal Reserve scales back its monetary stimulus, boosting bond yields. Read more.