JOHANNESBURG, Oct 25 (Reuters) - South African government bonds fell sharply and the rand tumbled early on Thursday, extending losses from the previous session after Finance Minister Tito Mboweni’s medium-term budget forecast weak growth and wider deficits.
* At 0610 GMT, the yield on the rand-denominated benchmark 2026 bond was up 16.5 basis points at 9.465 percent. That compares to a yield of 9.135 percent before Mboweni’s speech.
* The rand was 0.5 percent weaker on the day at 14.6200 versus the dollar.
* Mboweni, a former central banker, raised the deficit estimate for the 2018/19 fiscal year to 4 percent of gross domestic product while halving the growth forecast for this year to 0.7 percent.
* Investors are skittish as Africa’s most industrialised economy struggles with rising debt, which risks stripping the country of its last investment grade credit rating.
* President Cyril Ramaphosa has made reviving economic growth a priority since replacing scandal-plagued Jacob Zuma in February, but he has been frustrated by infighting in the ruling African National Congress and severe fiscal constraints.
* Ramaphosa will court investors at a three-day investment summit starting on Thursday, where he will be looking for new pledges to meet his target of $100 billion of new investments over the next five years.
Reporting by Alexander Winning; Editing by Susan Fenton