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 of scale is simply unprecedented

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 of scale is simply unprecedented. An estimated eye-watering S12 trilion of discretionary fiscal support has been provided globally during the pandemic. Such expenditure has come in the form of support to the unemployed, small businesses, and struggling sectors to save livelihoods and keep economies buoyant . Crucially though, for many countries in sub-Saharan Africa, these fiscal stimuli packages have deepened their debt challenges South Africa is one such example. Although the country's pre-pandemic forecast for debt-to-GDP ratio for 2020 was already high at 65.6 percent, supporting the economy through the pandemic required the government to breach the spending ceiling and expand its borrowing-raising the forecasted debt-to GDP ratio to 80.5 percent for 2020. The strain of higher debt can significantly damage a country's long- COEC89-844 - Supplementary Deferred Assessment Paper Block 4 2021 [V1.0 Page 5 of 8 run growth prospects: Indeed, a study by the World Bank found that in emerging markets, the loss of annual real growth is 0.02 percentage points for each percentage point over a 54 percent debt-to-GDP ratio So, after we recover from the health crisis, how do we recover from the economic damage? Stimulating economic recovery requires at least three key responses strengthening confidence in South Africa's ability to adhere to a fiscal consolidation path, improving the efficiency of expenditures, and finally strengthening revenue mobilization First, South Africa must restore confidence in its proposed fiscal consolidation path. Earlier this year, Moody's downgrading left South Africa without an investment grade rating for the first time since the advent of its democracy. This move put pressure on domestic capital markets and reduced confidence in the South African economy, manifested in higher bond yields, exchange rate depreciation, and by extension, increased borrowing costs. As a result, the fiscal consolidation path presented in the most recent budget for 2020/2021 has been met with skepticism from the market. Indeed, the President's Economic Advisory Council noted that the fiscal consolidation path suggested by the goverment is neither desirable nor believable. South African authorities therefore must pursue and ultimately deliver on the proposed structural reforms of reducing the public wage bil to signal that they are serious about fiscal consolidation four Adapted to and from this to Del The Comic Theory 2001 Online Available at...22 come 2004 The article states that the COVID-19 pandemic has seen the widespread use of expansionary fiscal policies which, in terms of scale, is simply unprecedented. An estimated eye-watering $12 trilion of discretionary fiscal support has been provided globally during the pandemic 4.1 Identify and explain the type of fiscal stimulus packages adopted and implemented by most governments globally due to the effects of the COVID pandemic. (4 Marks) 4.2 Mustrate and explain how the fiscal stimulus package identified in Question 4.1 would impact the level of Real Gross Domestic Product if it is successfully implemented. (8 Marks) 4.3 Provide evidence from the scenario of what actions the South African government should implement to improve economic recovery after the epidemic despite the implementation of fiscal stimulus packages during the COVID-19 epidemic. (8 Marks) COECB1-B44 - Supplementary/Deferred Assessment Paper Block 4 2021 | V1.0 Page 6 of 8 4.4 The article states that an estimated eye-watering $12 trillion of discretionary fiscal support has been provided globally during the pandemic. Explain the three main macroeconomic lags that would affect the $12 trillion discretionary fiscal support yielding quick positive