SA will "stave off" a sovereign credit rating downgrade to subinvestment grade, or junk status, particularly if the budget on February 24 clearly states how higher economic growth will be achieved and fiscal prudence adhered to, Standard Bank chief economist Goolam Ballim said at a briefing on Tuesday.A rating downgrade would cause capital outflows, weaken the rand and raise the cost of borrowing for government and local companies that borrow on international markets."We are pressed now to act and I have highlighted that February 24 is SA’s date with destiny because should we fail, especially on that date, then a downgrade to subinvestment in June will be a certainty," Mr Ballim said. "However … if we do enough in February to avert the downgrade in June, it signals that an inflection point has been reached and a new course is being charted."Standard & Poor’s rates SA one level above sub investment grade at BBB-. The negative outlook attached to the rating implies that a downgrade to...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.