Matthew delves into what financing the budget deficit in the post-Corona world means. Unprecedented deficits and debt levels are both the result of structural and COVID crisis related factors. Financing the budget deficit over the next few years poses a challenge that we have not faced in the democratic era, and raises a number of questions and concerns about sustainability and macroeconomic impacts:
- Are the public finances facing a financing crunch?
- How can the financing requirement be met?
- What are the opportunities and limits of QE by the SARB?
- Will we need more funding from the IMF?
- What will the role of QE in advanced countries be?