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Economics2h 34m ago
A new study by Luyanda Majenge and Simiso Msomi, based on more than four decades of data (1980–2024), found that South Africa's government spending stimulates economic activity only in the short run and does not permanently raise its growth trajectory.
South Africa
Who
Luyanda Majenge and Simiso Msomi
What
A new study by Luyanda Majenge and Simiso Msomi, based on more than four decades of data (1980–2024), found that South Africa's government spending stimulates economic activity only in the short run and does not permanently raise its growth trajectory.
When
Wed, 17 Jun 2026 08:01:37 GMT · 2h 34m ago
Where
South Africa ·
Why
The research, published in the Journal of Risk and Financial Management, applied advanced nonlinear econometric models to analyze how fiscal policy interacts with growth under changing economic conditions in South Africa.
The Frontline Impact
How this affects you
This study suggests that increased government spending in emerging economies like South Africa acts mainly as a short-term stabilization tool rather than a driver of sustained economic growth, primarily due to factors like public debt, corruption, and institutional weaknesses. This implies that extensive public spending without addressing underlying structural issues may not lead to long-term development.
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