Downgrade hangs over SA, warns S&P
S&P Global Ratings says weak government-related entities remain a danger
S&P Global Ratings has once again warned SA that its sovereign credit rating hangs in the balance if it enters recession, or wealth levels decline in dollar terms, but local observers are upbeat the economy has seen the worst behind it. S&P has SA rated on its lowest rung of investment grade status at BBB-. A negative ratings action from the agency would result in SA entering subinvestment, or junk, status. However, this comes as the South African Chamber of Commerce and Industry (Sacci) business confidence index showed on Wednesday that business sentiment had held steady in December 2016 compared to 2015. In regional reports on emerging markets’ sovereign ratings trends, S&P, which has SA on a negative outlook, said: "Downward rating pressure would also mount if net general government debt and contingent liabilities related to financially weak government-related entities exceeded our current expectations. "A reduction in fiscal flexibility may also lead us to further narrow the gap...
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