SA avoids ratings downgrade
Ratings agency Standard & Poor’s (S&P) has given South Africa a stay of execution regarding a ratings downgrade, to the collective relief of many. It did, however, express concern over the country’s low growth and increasing political instability. It also revised its growth forecast for this year to 0.6%, down from 0.8%. The Treasury welcomed S&P’s decision, saying:
"The rating outcome demonstrates that South Africans can unite, especially during difficult times, to achieve a common mission."
S&P kept its negative outlook on the rating, warning that it could, however, lower the rating if GDP growth did not improve in line with expectations, wealth levels continued to decline in dollar terms, or institutions become weaker "due to political interference affecting the government's policy framework". S&P also said it could revise the outlook to stable if it observed "policy implementation leading to improving business confidence and increasing private sector investment".