S&P re­vises out­look on SA

CityPress - - News -

Credit rat­ing agency Stan­dard & Poor’s (S&P) on Fri­day re­vised the out­look on South Africa to neg­a­tive from sta­ble.

“We af­firmed the long- and short-term for­eign cur­rency sov­er­eign credit rat­ings on South Africa at BBB-/A-3. We also af­firmed the BBB+/A-2 long- and short-term lo­cal cur­rency rat­ings,” S&P said.

“The neg­a­tive out­look re­flects our view that gross do­mes­tic prod­uct growth might be lower than we cur­rently ex­pect. For in­stance, due to per­sis­tent elec­tric­ity short­ages, con­tin­ued weak busi­ness con­fi­dence, or labour dis­putes es­ca­lat­ing again. The out­look also re­flects our view that fis­cal flex­i­bil­ity might re­duce, ow­ing to con­tin­gency risks from state-owned en­ti­ties with weak bal­ance sheets,” the agency said.

By 7pm on Fri­day, the rand was 0.63% lower against the dol­lar at R14.29. Ac­cord­ing to S&P, the out­look re­vi­sion re­flected South Africa’s still slow pace of eco­nomic growth, which the agency re­vised down fur­ther to 1.4% for 2015 from its June es­ti­mate of 2.1%.

– Fin24

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