EDITORIAL: Rating reprieve buys time
The prospect of a downgrade to junk status within the next 12 months still looms
SA has at last emerged from the latest round of ratings agency reviews relatively unscathed and, crucially, with its investment grade rating from all three of the major agencies intact. That is a most welcome reprieve, and Finance Minister Pravin Gordhan and the team of business and labour leaders he has been working with deserve to be commended for their collaboration and the intense effort they have put into averting a downgrade. The tone of Friday evening’s rating report from S&P serves as a firm reminder, however, that they may have to work a lot harder next time. The report was remarkably negative given that the agency chose to affirm rather than downgrade SA’s foreign currency rating, which is just one notch above subinvestment grade and on negative outlook. That negative outlook, which was put on SA’s rating a year ago, has a 24-month timeline. So we have just one more year for S&P to resolve it one way or the other — by either downgrading SA to subinvestment grade (junk stat...
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