Proceedings of 10th Annual London Business Research Conference
10 - 11 August 2015, Imperial College, London, UK, ISBN: 978-1-922069-81-8
Fiscal Policy Challenges: A Comparitive Analysis of BRICS
Countries
Andre Mellet
This study analyse the consequence of counter cyclical fiscal policy after the 2007 2009 global financial crisis. Fiscal stimulus programmes were proposed by the G20
member countries to reduce the negative impact on growth and employment of the
global financial crisis. An interpretivistic research methodology is followed to analyse
the elevated government debt and budget deficits of South Africa relative to the BRICS
countries. The analysis of government debt in the USA and Europe pose a stark reality
relative to the BRICS countries.The Washington G20 summit in 2008 proposed
significant fiscal measures to stimulate demand. The Cannes G20 summit in 2011
recommended fiscal consolidation plans to reduce debt-to-GDP ratios. The Los Cabos
G20 summit in 2012 and the Cairns G20 summit in 2014 proposed economic policies
again to stimulate growth. Whilst the USA and Europe have not any scope to stimulate
their economies anymore, most BRICS countries has scope to stimulate but are plaged
by structural and geopolitical factors to continue stimulating demand The South African
debt escalates the fastest of the BRICS countries which limites the scope of the South
African fiscal authority to continue stimulating demand. This study highlights the
importance of a new approach for South Africa to create sustained growth.
Global financial crisis, counter cyclical policy, budget deficit, government debt, G20
countries, BRICS, South Africa, sustainable growth
JEL Codes: Fiscal policy, H30, H62 and H63
______________________________________________________________________
Dr. Andre Mellet, School of Economics, North-West University, Hendrick Van Eck Boulevard,
Vanderbijlpark, South Africa, Telephone: 016 910 3362, Cell Phone: 0721334638, Email:
amellet@absamail.co.za, Email: andre.mellet@nwu.ac.za