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Political and macroeconomic uncertainty have taken centre stage following President Jacob Zuma's cabinet reshuffle and the firing of the minister of finance and his deputy on March 30. The subsequent downgrades by S&P Global Ratings and Fitch have further increased concerns about South Africa's economic outlook. Although the downgrades came sooner than expected, policy uncertainty and an eventual foreign currency downgrade to sub-investment grade had been included in many economists' forecasts for some time. The odds of a downgrade at some point between 2017 and 2019 had always been high on expectations of low per-capita growth. It is therefore not yet necessary to significantly alter expectations of how the economy will perform. Nonetheless, growth expectations will be tweaked lower to reflect even greater political and policy uncertainty than before and the impact of the earlier-than-expected downgrade. The macroeconomic environment has also become even more uncertain. As a result...

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