Weak growth remains biggest risk to SA’s rating, Standard & Poor’s warns
SA’s very weak economic growth remains the biggest risk that could lead to a credit rating downgrade, rating agency Standard & Poor’s (S&P) says."The pressures on the ratings remain primarily on the issues around growth," S&P’s associate director for sovereign ratings, Gardner Rusike, said at the rating agency’s briefing on Wednesday.The agency has revised down SA’s economic growth forecast for this year to 0.8% from 1.6% in December. It forecasts growth at 1.7% next year.A downgrade by S&P will take SA’s credit rating to subinvestment grade, or junk, which will raise the cost at which the government borrows in markets and cause rand weakness. S&P’s next review is in June."If growth were to improve faster, that could help to stabilise the ratings," Mr Rusike said."On the external factors, there is very little that SA can control … but there is a lot more that can be done on the domestic factors," Mr Rusike said.SA’s challenges remain electricity supply constraints, labour issues inc...
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