S&P revises outlook on SA
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%.