S&P warns on political risks in SA
Markets are waiting for a decision from Moody’s, which put SA on review for a downgrade
SA on Friday dodged a further ratings downgrade from S&P Global Ratings (S&P), but remains in the danger zone: Moody’s is expected to cut SA’s ratings to just one notch above junk in the next couple of weeks; and S&P could look to junk the local currency rating in December. S&P, which in April junked SA’s foreign-currency rating after the cabinet reshuffle, on Friday night affirmed its ratings, but kept SA on negative outlook, warning that political risks would remain elevated in 2017. Moody’s will be watching closely to see if economic growth or the October budget disappoint or the finances of SA’s state-owned enterprises (SOEs) deteriorate. Political risk could “distract from economic growth enhancing priorities, slow the pace of fiscal consolidation, and impact upon investor and consumer confidence, more than we currently project”, the agency said. S&P is the only one of the three ratings agencies whose local currency rating, on SA’s rand-denominated debt, is a notch higher than ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.