Fin24

Govt: SA won't be downgraded

2011-08-08 21:06

Johannesburg - Treasury sees no change to the country's credit rating after the US downgrade by Standard and Poor, director general Lungisa Fuzile said on Monday.

"We interact with (ratings agencies) on a regular basis ... We don't foresee any change in the rating of South Africa in the foresseable future," Fuzile said on private station Talk Radio 702

Last Friday ratings agency Standard & Poor's docked the US from a sterling AAA to a AA+ rating, largely because of the failure of bitterly divided US leaders to reach a consensus on containing the country's spiraling debt.

In January ratings agency Fitch raised its outlook for South Africa from "negative" to "stable," saying the country's economy had weathered the global recession well.

"All rating agencies rate South Africa at an investment grade. Standard and Poor's in particular, affirmed South Africa's sovereign rating and even revised the rating outlook from negative to stable."

The institutions said they were confident that the 3.4% growth forecast and fiscal projections outlined during the national budget would be met.

But anaysts believe that the problems in developed economies would eventually affect the local economy which is already showing signs of slowing.

"We are not in nearly such a bad situation but if the world economy fell into recession we would also shrink," Nedbank economist Nicky Weimar told local media.

 

Comments
  • Obama Bin Laden - 2011-08-08 21:25

    After you nationalise the mines, there won't be a rating low enough for us

      Yasien - 2011-08-09 02:39

      only rating for south africa is ANC forget BBB

  • Obama Bin Laden - 2011-08-08 21:34

    A sangoma probably made this forecast

  • CoolKiwi - 2011-08-08 21:37

    Well SA is rated BBB. Can't really be downgraded much more than that so no worries really.

      Ya Beauty! - 2011-08-09 10:59

      No emerging market has a AAA rating even China or Russia etc so its no consiqencial, its about growth if you do not have growth then you have to borrow to pay your bills which is what the West has been doing for years and its caught up with them......the balance of power has shifted...

  • clark - 2011-08-08 22:06

    - I wonder if these rating agencies are familiar with the Anc's economic and nationalisation policies ? Are they aware of the imbalances that exist in the taxpaying base ? On the evidence Our BOP deficit is going to worsen, along with interest rates and value of the Rand.

  • Bart Zimzon - 2011-08-08 22:11

    SA has a BBB+ rating from S&P way to go for AA+ like USA

  • vince muller - 2011-08-08 22:11

    Lungisa Fuzile, you've got no flippen clue. Do you know how many people have lost their jobs this year and how many will still loose their jobs. And the union demands, and corruption? And you recon a peanut governed country like the NEW SOUTH AFRICA will not be affected. That's already in progress. Wake up.

      brown_bread - 2011-08-09 09:50

      why 'new south africa'. why not just 'south africa' do you have issues? irrelevant.

  • SAFCan - 2011-08-08 22:47

    Our government needs to realise that in economic or GDP terms, South Africa is small fry in a very big global economy. Mismanagement, fraud and theft is doing our economy more harm than the US's economic woes! Rid our economy of incompetent government officials and we should do OK through uncertain economic times!

  • boerqwhaas - 2011-08-09 00:16

    SA's rating is one grade above highly speculative. Its not good at all. The US must fall quite a few levels before getting there, and given the degree of anxiety this created, it will be a big election issue. Hopefully this will wake people in US up as to what "change" Obama promised in 2008, and is finally delivering. CUT, CAP and BALANCE - then they'll be back to AAA in 3 years.

      Ya Beauty! - 2011-08-09 10:57

      SA is an emerging marketing, hence the rating even China does not have an AAA rating educate yourself....

      Roger - 2011-08-09 17:11

      @Ya Beauty. Zim was also an emerging market and a prosperous one at that. Look what happened when an illiterate government took over. Now they have to start all over. I am not asking to educate yourself, just to open your eyes and stop being naive.

  • Ya Beauty! - 2011-08-09 06:15

    You of little Faith, SA rating is stable plus the economy will continue to grow. To add on the US has massive debts with a shrinking economy so their rating is irrelavant until about 2016 when the debt matures and then mark my words the western world will collapse. China is already fast becoming a super power and Africa is going to benefit a lot. No country in the world can control market forces you can not go against the trend its the beginning of the end for the western world as we know it and emerging markets are the future read "The world is flat" educate yourselves don't just be empty vessels that make the most noise on this site without a clue of what really going on.

      gmain - 2011-08-09 08:13

      hmmm. the ostrich effect won't work either Ya Beauty.

      clark - 2011-08-09 15:43

      - Ya beauty the only clueless one here is you.

  • Deeteem - 2011-08-09 07:08

    We are already rated as EE/AA !!

  • Blikskottel - 2011-08-09 07:23

    There is no way that RSA ratings or Rand value is underpoinned by the real economy or the social situation in the country. Money inflows makes things look rosy, but these are specualative at best and will eventually be removed, with interest might I add.

      Met - 2011-08-09 09:57

      You are so right and apart from interest, the value of the Rand is expected to decline drastically, so the country will be repaying MUCH more. By next year, SAs on budget debt will be around R1300 billion.The inflow of capital into SA is due to international sentiment for emerging countries, very short term which can evaporate overnight

  • gmain - 2011-08-09 08:12

    overrated. can't help but feel we r gonna make greece look prosperous. i just hope i am wrong.

      Ya Beauty! - 2011-08-09 10:55

      Mate the Greeks did not pay tax hence lies the problem educate yourself SA is a growing economy surrounded by countries with on average growth rates of about 7-10% over the next 10 years even zim will grow at 8-10% these are fundermentals of an economy, sorrry budy SA will never be another Greece....really Sorry but its not going to happen even if Malema ran the country unfortunately this again would never happen

      clark - 2011-08-09 12:10

      - @Ya Beauty - Dont know how you arrive at your growth projections. No growth will ever be achieved with current Anc economic policies, least of all if God forbid ,Maleme was running the show. In case you had'nt noticed, our FDI fell by 70% last year. I'd suggest you need the education - Mate.

      Jack Spam - 2011-08-09 20:09

      @Ya Beauty! - 7-10% growth, really? Where did you get that from?

  • Brent - 2011-08-09 08:57

    this is the classic example of the results of a polarised/non centrist leadership.

  • Mad Dog - 2011-08-09 10:50

    Let the technocrats (or otherwise educated) rule in South Africa. The anc with their uneducated leaders are making a hash of this beautiful country of ours. The only government departments that are a success are the technical financial ones. Even the armed forces, which are very technical, are run by twits playing with their toy soldiers, and our billions in tax money. Vote DA for a better South Africa for all. It will happen sooner than you think as the anc are going down-hill at a rate of knots! Viva DA! Vote DA!

  • Monica - 2011-08-09 20:46

    As long the Government is stealing funds and tender fraud; this country is going to have strikes and considering there is only like 8% percent of whites employed in this country; whilst there is millions of black people; why are you still have affirmative action; employing incompetent people in various Government departments. Get people employed to sweep the streets; that will create a lot of work; let people that work on streets; clean up the mess!

  • amabok - 2011-08-09 22:21

    Nationalisation of the mines will result in catastrophic downgrades.

  • Ya Beauty! - 2011-08-10 02:36

    Roger naivity is one that says that dictator in Zim is illitrate when he is probably one of the most educated fools on planet earth. Western counrties have borrowed too much money which they can not pay off unfortunately you can nor forclosure a country but that the position they are in. To make matters worse they have no growth in their economies, high unemployment rate plus ageing population which needs welfare. If you put all these into context then you have a major problem and its only going to get worse, the riots in London are a sign of whats to come,

  • marcusvandermerwe - 2011-08-10 19:48

    Reports earlier today suggest that SA will shed another 1/2mil jobs by year-end. We only have about 5 million taxpayers, meaning the tax base falls 10% right? What does that mean for our credit rating?

  • pages:
  • 1