Unic Press UK: S&P Global Ratings on Friday reiterated that the rate of economic growth of South Africa is weak, thereby affirming its ‘BB+/B’ foreign currency, ‘BBB-/A-3’ local currency, and zaAA-/zaA-1 national scale ratings on South Africa.
In a report that was published on Friday, the 2nd May 2017, S&P Global Ratings said:
“We are affirming our ‘BB+/B’ foreign currency, ‘BBB-/A-3’ local currency, and zaAA-/zaA-1 national scale ratings on South Africa… We consider that political risks will remain elevated this year, which could distract from economic growth-enhancing priorities, slow the pace of fiscal consolidation, and weigh on investor and consumer confidence, more than we currently project. Political risks will remain high at least for the remainder of the year, in the run-up to the African National Congress (ANC) elective conference to be held in December 2017. In our view, the policy agenda is at increased risk of being overshadowed by political infighting. We believe the current political environment could result in the private sector delaying business investment decisions, thereby restraining GDP growth. Nevertheless, we believe growth will rebound from the paltry 0.3% of GDP in 2016 to 1% in 2017 and average 1.5% in 2017-2020, thanks to an improvement in agriculture output after a drought and improved terms of trade. Since 2015, South Africa’s real per capita GDP growth rate has continued to decline, averaging -0.7% over 2015-2018. We estimate GDP per capita at US$6,000 in 2017.“
In summation, South African government debt remains junk, a high-yield, a risky investment.
The South African government says it is committed toward consummation of the key policies that will fillip consumer confidence, improve business and improve the rate of economic growth.
