S&P warns of downgrade if SA misses targets
South Africa’s credit rating could be downgraded if the country’s growth and tax collections missed forecasts by a wide berth, said S&P Global analyst Gardner Rusike.
In April, S&P Global downgraded South Africa’s foreign currency rating to “junk” status with a negative outlook.
“When you have a negative outlook, it means there is a risk that the rating could be lowered,” Rusike said.
“If you are getting negative news, it depends to what extent the deterioration will be in the pace of economic growth as well as the fiscal deficit. If these are within smaller thresholds, then they could potentially be managed ... but if they are much larger than our expectations then that would have a negative impact,” he told City Press on Friday.
In the first quarter of the SA Revenue Service’s (Sars’) financial year starting April 1, the agency collected tax of R261.4 billion – up 5.8% compared with the same period in 2016. If Sars were to grow its revenue by that margin for the year ending March 2018, then it will miss its tax target of R1.265 trillion by R55 billion.