Economists are concerned SA is not out of the woods for a credit rating downgrade. While Finance Minister Pravin Gordhan’s relatively conservative budget may have bought SA some time, ratings agencies are keeping a close eye on the country’s stability. Zuzana Brixiova, senior analyst at Moody’s Investors Service, said: "Amid challenging conditions, the 2017-18 budget sets out fiscal consolidation targets consistent with commitments in the 2016 mid-year policy statement, including a gradual stabilising of the debt-to-GDP ratio. "While government guarantees relative to GDP are also projected to stabilise, their actual drawdowns are rising and represent increasing risks to the government’s fiscal position." SA’s economy had a rough year in 2016 with growth of just 0.5%. With a modest recovery of 1.3% forecast for 2017, Gordhan said "green shoots" were discernible for the economy. But not all economists are convinced — SA may still be poised for a credit ratings downgrade if the politic...

BL Premium

This article is reserved for our subscribers.

A subscription helps you enjoy the best of our business content every day along with benefits such as exclusive Financial Times articles, ProfileData financial data, and digital access to the Sunday Times and Times Select.

Already subscribed? Simply sign in below.



Questions or problems? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now