Signs point to new downgrade as uncertainty blights SA's outlook
Economists warn that policy and political uncertainty could lead to a sovereign credit rating cut in 2017 or 2018
The probability of another sovereign credit rating downgrade is high as SA has been plagued by more policy and political uncertainty, economists warned on Wednesday. This is compounded by the high level of uncertainty surrounding ANC succession. The country is preparing for the medium-term budget policy statement, which is taking place in less than two weeks, but the lead-up has been coloured by uncertainty about SA’s policy direction, say economists. Old Mutual economist Johann Els, speaking at an Old Mutual discussion about growth prospects in coming quarters, said: "We’re all feeling a sense of crisis and growth is on a downward trajectory. "We’re in a period of policy uncertainty, which probably means we’re going to be downgraded by the ratings agencies." Els said SA needed at least 2% growth to ensure that the government did not fall into a debt trap. SA had not benefited from improved global growth, despite having an open economy, he said. "There is strength in this global rec...
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