Fitch forecasts zero real gross domestic product (GDP) growth for South Africa this year, due to severe power shortages in recent months that are likely to weigh heavily on GDP.
It says strong investment in power generation after the deregulation of the sector should moderately improve energy supply from 2024 and support the recovery.
Rutendo Jambwa, Economic Credit Rating Associate at Credit Rating Analytics, says the country’s economic growth is of concern.
This comes as the country recorded a 32.9% unemployment rate in the first quarter of this year.
“Another driver has been a high debt to government debt to GDP ratio, which was or which has been forecasted to be at about 72.9% in 2023, which is above the double B median of about 56.2% and in spite of greater consolidation or fiscal consolidation efforts on the expenditure side, these efforts have been constrained by factors such as contingent claims and or from SOE’s, as well as low revenue collection as a result of the secured economic environment.”
Fitch keeps SA’s long-term and local currency debt ratings unchanged: