HILARY JOFFE: Markets and ratings agencies to keep a close eye on budget
Finance Minister Pravin Gordhan tables his budget in Parliament on Thursday in a turbulent political context in which markets and ratings agencies are watching whether the minister himself will survive in office as closely as they will be watching the numbers he will present. All three major credit-rating agencies have SA on negative outlook for a downgrade, which could take it down to sub-investment grade (junk) status. They have warned any retreat from the government’s commitment to bring down the deficit and stabilise the level of public debt by 2019/20 would be a cause for concern. All three have cited concerns about SA’s political tensions and infighting and what that might mean for policy stability as a negative for the ratings, with SA’s very weak growth outlook. The narrative of Gordhan’s budget speech will also be closely scrutinized. He is expected to talk about "transformation" but to emphasize the need for inclusive economic growth. Gordhan is expected to provide details...
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