IDEAS home Printed from https://ideas.repec.org/a/eco/journ1/2023-04-5.html
   My bibliography  Save this article

The Determinants of Fiscal Deficit in South Africa: A Bayesian Vector Autoregressive Approach

Author

Listed:
  • Atoko Kasongo

    (Human Science Research Council, 118 Buitengracht St, Cape Town, South Africa.)

Abstract

This study empirically investigates the factors influencing South Africa's fiscal deficit from 1975 to 2021. The research design used the Bayesian vector autoregressive estimation with the Minestor prior. The findings are analysed using the impulse response function and variance decomposition. The findings revealed that government debt, GDP growth, money supply, and interest rate as determinants of the fiscal deficit. Impulse response functions showed positive and significant impacts of government debt on the fiscal deficit; negative and significant impacts of economic growth, money supply, and interest rate on fiscal deficits. The variance decomposition showed that economic growth and national debt explained the variations in fiscal deficit in the long run. The relationship between macroeconomic factors and fiscal deficit could have social consequences for the even distribution of resources, equitable growth, and overall welfare. This study contributes to the limited literature on the macroeconomic determinants of fiscal deficit in the South African economy and Africa at large.

Suggested Citation

  • Atoko Kasongo, 2023. "The Determinants of Fiscal Deficit in South Africa: A Bayesian Vector Autoregressive Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 13(4), pages 30-36, July.
    • Handle: RePEc:eco:journ1:2023-04-5
    as

    Download full text from publisher

    File URL: https://www.econjournals.com/index.php/ijefi/article/download/14433/7353
    Download Restriction: no
    File URL: https://www.econjournals.com/index.php/ijefi/article/view/14433
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Oluwafadekemi Aero & Adeyemi A. Ogundipe, 2018. "Fiscal Deficit and Economic Growth in Nigeria: Ascertaining a Feasible Threshold," International Journal of Economics and Financial Issues, Econjournals, vol. 8(3), pages 296-306.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wenchao Ban & Liangduo Shen, 2022. "PM2.5 Prediction Based on the CEEMDAN Algorithm and a Machine Learning Hybrid Model," Sustainability, MDPI, vol. 14(23), pages 1-15, December.
    2. Xue-Bo Jin & Nian-Xiang Yang & Xiao-Yi Wang & Yu-Ting Bai & Ting-Li Su & Jian-Lei Kong, 2020. "Deep Hybrid Model Based on EMD with Classification by Frequency Characteristics for Long-Term Air Quality Prediction," Mathematics, MDPI, vol. 8(2), pages 1-17, February.

    More about this item

    Keywords

    fiscal deficit; Bayesian VAR; South Africa; economic growth; government debt; budget balance;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eco:journ1:2023-04-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ilhan Ozturk (email available below). General contact details of provider: http://www.econjournals.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.