Johannesburg - A team from credit rating agency Standard & Poor's visited South Africa last week for meetings, the Treasury said, ahead of a review due to be published on June 3 which could see the country's debt rating cut to junk.
South African officials also spoke to Fitch Ratings by phone, National Treasury spokeswoman Phumza Macanda said. Fitch has not given a date for its next rating decision.
S&P rates the debt of Africa's most industrialised country at BBB-, one notch above speculative grade and with a negative outlook, while Fitch assigns a similar rating after a downgrade in December.
Seen by numerous analysts as the most likely to push South Africa to “junk” status, S&P said earlier in May that the weak economy posed an immediate risk to the rating.
Read also: Gordhan’s plea: SA, unite to fight downgrade
“S&P's was here last week and concluded all their meetings ... They met with government, labour representatives, some political leaders and some business leaders as well,” Macanda said in an emailed response late on Monday.
A cut to below investment grade would push up South Africa's borrowing costs.
Last week, the central bank cut its 2016 growth forecast to 0.6 percent from 0.8 percent, reflecting the risk the economy will tip into recession. Major sectors are already in decline.
“While we pray and hope for a reprieve it would be sensible and pragmatic for any business person and anyone engaged in the economy to anticipate the worst,” Standard Bank chief economist Goolam Ballim said.
Fitch said after Finance Minister Pravin Gordhan unveiled his budget in February that it saw a number of implementation risks to his plan to cut spending and lower debt.
The other major rating agency, Moody's, kept South Africa's rating on hold at Baa2 with a negative outlook, two notches above junk, on May 6. Government officials said afterwards that they do not expect South Africa's rating to be downgraded by S&P or Fitch.
REUTERS