Port Elizabeth - The South African government said on Friday it noted the Fitch rating agency's decision to affirm the country’s long-term foreign and local currency debt ratings at ‘BB+’ and to also revise the outlook to negative from stable.
Fitch said a widening budget deficit on the back of lower GDP growth and increased spending, including the government's support for its state-owned enterprises, particularly Eskom, as well as a downward revision of GDP growth in 2019, raised questions about the country's economic growth potential.
South Africa’s foreign and local currency credit ratings by Fitch remain below investment grade.
"Government is aware of the strain and risk that SOEs, particularly Eskom, present to the fiscal framework," the national Treasury said in a statement.
"Government is urgently working on stabilising Eskom while developing a broad strategy for its future. Additionally, government will have to make tough decisions in order to reverse the country’s debt trajectory and improve economic growth prospects."