It may just be President Cyril Ramaphosa’s good luck, but the ship that is SA Inc seems to have dodged an iceberg and is, if not on the right track entirely, at least heading in that vague direction.
This week, Statistics SA announced that GDP growth for the last three months of 2017 had been nearly double what economists expected — 3.1%, compared to predictions of 1.8%.
It pushed last year’s overall GDP growth to 1.3%. Granted, it’s nowhere near high enough to begin making a dent in SA’s real crisis — unemployment — but it’s a welcome fillip for the early days of the Ramaphosa administration.
The more positive implication is that there is now a real chance that ratings agency Moody’s may choose not to downgrade SA’s rating to junk this month. Already, the two other agencies — Fitch and S&P Global Ratings — have SA’s sovereign rating below investment grade. It’s critical that SA avoid a downgrade from Moody’s as this would trigger expulsion from the Citi world government bond index.
The GDP numbers, the Vat increase to 15%, and the fact that Nhlanhla Nene is back to steer treasury, give SA the best hope yet of avoiding that downgrade. It’s a welcome indication that, contrary to the scepticism of many, when things turn for the better, they can turn quickly.