• News
  • Sport
  • TV
  • Radio
  • Education
  • TV Licences
  • Contact Us
  • SOUTH AFRICA
  • POLITICS
  • BUSINESS
  • SPORT
  • AFRICA
  • WORLD
  • FEATURES
  • OPINION
No Result
View All Result
1
Home Business

S&P, Fitch leave long-term sovereign credit ratings for SA unchanged

22 May 2021, 4:44 AM  |
Naledi Ngcobo Naledi Ngcobo |  @SABCNews
Fitch says it expects the country's economy to grow by 4.3% in 2021 and 2.5% in 2022 with a boost from commodity prices.

Fitch says it expects the country's economy to grow by 4.3% in 2021 and 2.5% in 2022 with a boost from commodity prices.

Image: Reuters

Fitch says it expects the country's economy to grow by 4.3% in 2021 and 2.5% in 2022 with a boost from commodity prices.

Both S&P Global and Fitch Ratings Agency have decided to leave their long-term sovereign credit ratings for South Africa unchanged three levels below investment grade.

S&P kept its stable outlook, while Fitch maintained its negative outlook of the country’s credit prospects.

In a scheduled rating report, S&P notes that structural constraints and a slow vaccination program will continue to undermine economic growth in the country.

In a responding statement, National Treasury says government’s fiscal strategy puts the country on course to achieve a large primary surplus to stabilise debt.

In its latest rating review of South Africa, Rating Agency Fitch says the negative outlook reflects significant risks to debt stabilisation.

Fitch says it expects the country’s economy to grow by 4.3% in 2021 and 2.5% in 2022 with a boost from commodity prices.

The agency anticipates that tight public finances and electricity shortages will hold back growth.

It says the government’s fiscal consolidation plan relies heavily on containing public sector wages.

Government responds to rating actions of S&P, Fitch:

S&P affirms South Africa’s long term foreign and local currency debt ratings at ‘BB-’ and ‘BB’, respectively.

The agency maintained a stable outlook. According to the agency, South Africa’s near-term economic performance and current account are experiencing a cyclical uplift as a result of a combination of base effects following a large economic contraction in 2020 and improving terms of trade from higher commodity prices.

However, structural constraints, a weak pace of economic reforms, and slow vaccination rates will continue to constrain medium-term economic growth and limit the government’s ability to contain the debt-to-GDP ratio.

Fitch affirms South Africa’s long term foreign and local currency debt ratings at ‘BB-’.

The agency maintained a negative outlook. According to Fitch, South Africa’s rating is constrained by high and rising government debt, low trend growth and exceptionally high inequality that will complicate consolidation efforts.

The negative outlook reflects continued substantial risks to debt stabilisation despite the better than expected fiscal outturns in the fiscal year ending March 2021.

Government acknowledges the pressures the country’s credit ratings face and remains committed to addressing them.

Additionally, Government is aware that it needs to fast track growth-enhancing strategies.

Operation Vulindlela is a key initiative in this regard and demonstrates Government’s commitment to fast-tracking the implementation of critical reforms that raise economic growth and improve fiscal sustainability.

Rating agencies have indicated that South Africa’s rating strengths include a credible central bank, a flexible exchange rate, an actively traded currency, deep capital markets as well as a favourable debt structure (low share of foreign currency debt) with long maturities, which should help counterbalance low economic growth and fiscal pressures.

Share article
Previous Post

Quake in China’s Yunnan province kills three – State media

Next Post

President Ramaphosa to hand over land title deeds in Limpopo

Related Posts

A local walks past electricity pylons during frequent power outages from South African utility Eskom, caused by its aging coal-fired plants, in Orlando, Soweto, South Africa, September 28, 2022.

Judgment reserved in load shedding case

23 March 2023, 4:10 PM
SARB logo

Interest rate hike inevitable: Economists

23 March 2023, 5:34 AM
Peter Hain arrives to attend the weekly cabinet meeting at number 10 Downing Street in London June 9, 2009. REUTERS/Stephen Hird

Hain slams UK government for lifting ban against Bain and Company

22 March 2023, 8:45 PM

IMF warns that global slowdown poses risks to SA’s economy

22 March 2023, 7:38 PM
Protesting Nehawu affiliated union members holding up a placard demanding a 10% salary hike.

Unions set the record refute wage settlement agreement reports

22 March 2023, 7:00 PM
Tutuka Power Station in Mpumalanga.

Electricity Minister pledges to minimise the impact of loadshedding this winter

22 March 2023, 6:21 PM
Next Post
Land

President Ramaphosa to hand over land title deeds in Limpopo

Most Viewed

  • 24hrs
  • Week
  • Month
  • UPDATE | Court hears evidence regarding Zuma’s medical records
  • SABC News crew attacked on N2 while monitoring protests
  • Unions set the record refute wage settlement agreement reports
  • BREAKING | EFF members arrested after clashes with police in Braamfontein Sunday night
  • WARNING | Graphic details: Mabopane businessman killed in a hail of bullets
  • Corporates prepare for a possible national blackout
  • UPDATE | Court hears evidence regarding Zuma’s medical records
  • SABC News crew attacked on N2 while monitoring protests
  • Wits SRC sued
  • Wits SRC president suspended
  • Unions set the record refute wage settlement agreement reports
  • ‘Any attempt to arrest Putin would be declaration of war on Russia’
  • EFF’s application for leave to appeal illegal land grabs interdict dismissed
  • VIDEO: EFF media briefing following March 20 national shutdown
  • Police investigate murder of 19-year-old in Westbury

LATEST

Workers on strike hold CGT labour union flags as they walk on railway tracks to block a TGV high speed train during a demonstration at the train station on the eve of the ninth day of national strike and protests, and after the pension reform was adopted as the French Parliament rejected two motions of no-confidence against the government, in Nice, France, March 22, 2023. REUTERS/Eric Gaillard
  • World

Protesters, police clash across France in day of strife over Macron’s pension changes


A local walks past electricity pylons during frequent power outages from South African utility Eskom, caused by its aging coal-fired plants, in Orlando, Soweto, South Africa, September 28, 2022.
  • Eskom rolling blackouts
  • Business

Judgment reserved in load shedding case


File Photo: Migrants seen on a boat
  • Africa

Migrant boats sink off Tunisia; five dead, at least 33 missing


Suspended Public Protector Busisiwe Mkhwebane.
  • South Africa

Section 194 Inquiry racing against time to find solution to Mkhwebane’s legal fees


[File Image] : Netherlands' Cody Gakpo looks dejected.
  • Sport

Virus hits Dutch squad ahead of France Euro qualifier


Crime scene and do not cross signage with blue police lights.
  • South Africa

Five killed in oThongathi shooting


Weather

  • About the SABC
  • Contact Us
  • Jobs
  • Advertise
  • Disclaimer
  • Site Map

SABC © 2023

No Result
View All Result
  • SOUTH AFRICA
  • POLITICS
  • BUSINESS
  • SPORT
  • AFRICA
  • WORLD
  • FEATURES
  • OPINION

© 2023

Previous Quake in China’s Yunnan province kills three – State media
Next Land President Ramaphosa to hand over land title deeds in Limpopo