Rob Davies wants ratings firms to know the worst of SA’s economic woe is over
SA can avoid a credit-rating downgrade in 2016 because economic growth — which has been one of the main reasons for previous downgrades — is over the worst, Trade and Industry Minister Rob Davies said on Thursday.The economy grew better than expected in the second quarter, resulting in the Reserve Bank upwardly revising its growth expectations for 2016 to 0.4%, from 0% before.The new growth projection for 2016 is expected to be the lowest since the 2008 recession. Many analysts expect growth to improve to 1% in 2017 and nearly 2% in 2018.Ratings agencies have cited the inability to raise economic growth to higher levels among the major factors that could result in SA being downgraded.The next ratings reviews are due in November and December and are crucial, as downgrades could result in further rand weakness and capital outflows. Ratings affirmation, however, could make SA more attractive to investors."I think the most important [factor] is [rating agencies] want to see that there i...
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