Government welcomes S&P’s decision to keep SA debt rating unchanged

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Government has welcomed S&P credit rating agency’s decision to keep South Africa’s long-term foreign and local currency debt ratings unchanged at junk status with a positive outlook.

In its latest rating review, S&P says government’s economic and fiscal reforms could improve the country’s medium-term growth and debt trajectory.

The agency further singled out the country’s low external debt position, flexible currency and deep domestic capital markets as credit strengths that could cushion the country against external rising financing risks.

National Treasury notes that its medium-term fiscal strategy prioritises achieving fiscal sustainability by narrowing the budget deficit and stabilising debt. It says increasing spending on policy priorities such as security and infrastructure, is further aimed at promoting economic growth and reducing fiscal and economic risks.

It says this includes support to key public entities and building fiscal buffers for future shocks.

Economic observers mostly predict SA’s credit rating to remain unchanged: