Government welcomes S&P’s decision to keep SA credit rating unchanged
Ratings agency, Standard and Poor (S&P) one of the world’s largest credit rating agencies has kept South Africa’s credit ratings unchanged despite the country’s growing debt.
The government has welcomed Standard and Poor (S&P) Global Ratings’ decision to affirm South Africa’s long-term foreign and local currency debt ratings at ‘BB-’ and ‘BB’, respectively, and maintain the stable outlook.
According to S&P, the stable outlook balances South Africa’s credit strengths – particularly a credible central bank, a flexible exchange rate, an actively traded currency, and deep capital markets – against infrastructure-related pressures on growth and downside risks to the fiscal and debt position.
“The agency also acknowledges that private-sector investment in power generation and renewables is picking up and will support the strengthening of real Gross Domestic Product (GDP) growth over the medium term.
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In a statement the National Treasury said “Over the next three years, the government will focus on raising GDP growth by improving the provision of electricity and logistics, enhancing the delivery of infrastructure and restructuring the state to be efficient and fit-for-purpose”.
The department said fiscal policy continues to support this approach by stabilising debt and debt-service costs.
Additionally, fiscal consolidation will be implemented through spending reductions, efficiency measures across government and moderate tax revenue measures.