SA's economy expected to shrink by 7.8%

He's delivering the medium-term budget policy statement in Parliament.

The economy has been hard-hit by the unprecedented covid-19, which affected jobs and businesses.

Mboweni says a sharp global recession is underway. " We need to get the economy to grow so we that we can collect more tax and therefore have better fiscal sustainability. 

"The International Monetary Fund now expects global output to contract by 4.4 percent in 2020, before rebounding to 5.2 percent in 2021." 

He says we're currently borrowing at a rate of R2.1 billion a day.

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Mboweni says this can't continue.

Mboweni says the country doesn't want to follow in the footsteps of other countries that have defaulted on their debt this year. 

"Countries that find themselves in default usually see sharp GDP contractions in and major currency depreciation," he said. 

"On current trends, more of our taxes are being transferred to bondholders who hold our debt rather than to critical services for our people" 

Mboweni says an uncontrolled increase in borrowing costs would harm small businesses, ordinary South Africans, and the poor the most.