PRETORIA – The decision by ratings agency S&P Global to affirm South Africa’s long-term foreign and local currency debt ratings at "BB" and "BB+" respectively, and maintain the stable outlook, affords South Africa a chance to demonstrate further concrete implementation of measures aimed at turning around the growth trajectory, the National Treasury said.
According to S&P, the rating affirmation was underpinned by anemic economic growth in 2018 and high contingent liabilities continuing to weigh on South Africa’s fiscal prospects, and the new government was pursuing a series of economic reforms that should help boost the economy from 2019, despite structural impediments, chronic skills shortages, and high unemployment.
The stable outlook reflected S&P’s view that “the South African government will pursue a range of economic, social, and fiscal reforms, albeit over an extended period of time”.
S&P now expected South Africa’s gross domestic product (GDP) growth to average 0.8 percent in 2018 and 1.8 per cent in 2019; these forecasts were slightly higher than the 2018 MTBPS assumptions.
"Government notes S&P’s assessment of challenges and opportunities the country faces in the immediate to long-term and remains determined to achieve improved ratings in the period ahead," the Treasury said in a statement.