All three international credit ratings agencies hail budget
The ratings agencies applaud evidence of fiscal consolidation but warn that political and social pressures could test commitment
All three international credit ratings agencies have commended the consistency between last week’s budget numbers and October’s medium-term budget, a factor seen as evidence of the government’s continued commitment to fiscal consolidation. However, the agencies still have SA on negative outlook and will decide by the end of this year whether to downgrade the country’s credit rating or take it back to a stable outlook. In post-budget comments, they have again flagged political pressures and government guarantees to ailing state-owned enterprises as risks to the rating. The most positive comments came from S&P Global, whose SA MD, Konrad Reuss, said the fiscal side of the budget was "certainly very reassuring", with the deficit trajectory showing only minimal slippage in the outer years and the debt ratio marginally better than in the medium-term policy statement. "The budget is testimony to a continued strong commitment to fiscal consolidation," he said. S&P is regarded as the riskie...
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