S&P keeps SA rating unchanged
S&P Global on Friday kept its local currency rating for South Africa at investment grade and its long-term foreign currency rating at the first level of “junk” status. The outlook on both ratings was maintained at “negative”.
“The pace of economic growth remains weak, posing risks to the pace of fiscal consolidation,” S&P said.
“The negative outlook on the foreign and local currency ratings reflects our view that political risks will remain elevated this year, which could undermine economic growth and fiscal outcome,” the agency added.
S&P analyst Gardner Rusike said that, since the surprise Cabinet reshuffle and firing of former finance minister Pravin Gordhan, who was replaced by Malusi Gigaba, the agency had felt a bit better about the direction of South Africa’s fiscal policy, but it wouldn’t change its ratings for now.
The agency had cut its forecast of local growth from 1.4% to 1%, he added.
– Justin Brown