SA can take solace in a stable outlook, says S&P’s Konrad Reuss
SA should take some solace in a stable outlook, according to Konrad Reuss, S&P Global Ratings MD for Africa.
Speaking at the Vision 2030 Summit at Emperor’s Palace on Wednesday, Reuss said: "We should look at the stable outlook favourably. A stable outlook points out that the risks are not stacked on the downside unless things worsen."
SA has been on a downgrade cycle since 2012. Former president Jacob Zuma’s midnight Cabinet reshuffle in March last year led to SA’s credit rating being downgraded to junk status.
At the end of May this year, S&P affirmed SA’s credit rating at junk status with a stable outlook.
Reuss said debt had increased and S&P had become concerned about an unsustainable debt trajectory.
"All the downgrades over the span of five years hung together. We were flagging social issues in light of low economic growth," he said.
"We had to prune back our growth forecast year after year. And then there were spending pressures because of development needs and infrastructure needs."