Staff Writer
SOUTH Africa is awaiting decisions regarding its credit rating by Fitch and Standard and Poor’s at the end of the week.
The two rating agencies will release their results on Friday following an assessment two weeks ago when they met business, labour and cabinet ministers.
The much anticipated decision by the rating agencies will signal whether South Africa is downgraded to junk status or not.
But ministers in the economics cluster expressed confidence in Parliament last Thursday that the country would not be downgraded.
Finance Minister Pravin Gordhan said the work that had been done was sufficient to demonstrate to the rating agencies South Africa’s economy was resilient and that the country was stable.
His counterpart at Rural Development and Land Reform, Gugile Nkwinti, said the fundamentals were in place and South Africa would recover from the slump. He said despite the difficulties the performance of the economy would pick up.
Tourism Minister Derek Hanekom reiterated that tourism remained a key sector in the economy.
He said tourism contributed 10% to GDP. This was a significant number compared to other sectors of the economy. Hanekom said tourism continued to thrive despite a depressed economy.
Fitch and Standard and Poor’s are the latest rating agencies set to announce their results after Moody’s a few weeks ago. However, economist Peter Attard Montalto, of Nomura, said they did not expect a change from Standard and Poor’s rating.
The country is one notch above the downgrade by the rating agency.
But the situation may change in the next round of reviews in December. Montalto said they were also revising South Africa’s growth rate from 0.9 to 0.6% this year.
Montalto said they would stick to their forecast of 1.5% economic growth for 2017 and 1.9% growth the following year, 2018.
Opposition parties in Parliament have been urging government to speak with one voice on matters of finance, governance and stability.
This was based on the Hawks actions regarding reported plans to arrest Gordhan. But the Hawks have denied charges against Gordhan.
The opposition parties have also called on the government to give Gordhan the support he requires to turn around economy.
Gordhan was appointed by President Jacob Zuma to lead a team of business leaders to reignite growth in the economy. Last week business called for the Hawks to back off and warned their action could undo the work that has been done.
Business said substantial progress had been made to fix the economy.