S&P warns of down­grade if SA misses tar­gets

CityPress - - Business - – Justin Brown

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.

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