S&P affirms SA’s debt ratings

Rating agency Standard and Poor’s (S&P) has affirmed South Africa’s debt ratings at sub-investment grade of BB minus and BB, and also maintained the positive outlook.

In its latest review released last night, S&P says the rating is still constrained by relatively low GDP growth rates, as well as sizable fiscal deficits and high government debt.

It says that despite the expected tabling of the budget next week and the removal of VAT, fiscal consolidation is planned to continue in the next three years.

The formation of the government of national unity had initially renewed the hopes of a credit upgrade for South Africa.

Late last year, S&P revised South Africa’s outlook to positive from stable, citing plans for accelerated economic reforms by the new government of national unity and a growing private investment.

National Treasury says it noted the latest decision by S&P. In a state, it says it will continue to focus its fiscal strategy to strike a balance between stabilising the public finances and reducing risks in the fiscal framework.

It will also ensure economic growth and support low-income and vulnerable households.