Acting head of the Treasury’s budget office Ian Stuart believes the government’s fiscal hole is deepening as SA’s economy is struggling to grow, which could cost SA its final investment-grade rating. A Business Day report notes Moody’s Investors Service – which has SA’s local debt one notch above junk status with a stable outlook – has repeatedly warned that rising debt levels could result in a downgrade. Stuart said the medium-term budget in October is likely to show a larger debt-to-GDP ratio following the steep contraction in the first quarter and low revenue collections. ‘Every budget we’ve presented in the last few years shows a higher debt to GDP. Then a few months into the year, we realise growth is not bouncing back in the way we thought it would and we have to revise that figure. That is our biggest issue,’ Stuart said. ‘We are on track for another medium-term budget policy statement that looks like this after Stats SA showed concerning growth figures in the first quarter, and the dwindling tax revenue. It suggests that it will be more of the same,’ he added. ‘The widening of the debt-to-GDP ratio isn’t a result of fiscal measures but it is structural in nature,’ Stuart said.