Loading...
See More

Ratings: Govt addressing concerns

Jan 10 2013 22:11 Sapa

Related Articles

Fitch cuts SA's ratings

Moody’s downgrades SA banks

ANC told to ignore ratings advice - report

Zuma insists SA not falling apart

More SA firms face downgrade - report

Political risks to watch in SA

 

Johannesburg - The government was trying to address the concerns that led to the Fitch ratings agency downgrading South Africa's sovereign debt on Thursday, the Treasury said.

"The South African government is consistently making efforts to address the concerns identified in Fitch's rating review which is aimed at mitigating growth and socio-economic concerns," the Treasury said in a statement.

Fitch announced it had downgraded South Africa's long-term foreign currency credit rating to BBB, meaning medium-class and currently satisfactory.

This was a depreciation by one unit from South Africa's prior classification as BBB+.

South Africa's short-term credit rating also declined slightly, from F2 to F3.

This meant the quality grade was reduced and that, while South Africa had adequate capacity to meet its obligations, present conditions could affect this in the short-term.

Fitch said diminished economic growth could affect the country's public finances and exacerbate social and political tensions.

There had also been a decline in competitiveness, due to wage settlements being higher than productivity. In addition "infrastructure constraints" had contributed to a widening current account deficit.

"Fitch has indicated that the stable outlook is due to its belief that South Africa's credit strength will limit the speed, magnitude and the likelihood of a further potential downgrade over the typical two-year outlook horizon."

The Treasury said the downgrade had its roots in economic troubles facing the Eurozone, one of South Africa's major trading partners.

The government was aware of South Africa's twin problems of poverty and unemployment, and the National Development Plan, adopted by the ruling party, intended to address these.

"The [ANC's Mangaung] conference resolutions give certainty on economic policy, which the Fitch report does not seem to fully appreciate," the Treasury said.

The 2012 Medium Term Budget Policy Statement showed the government's intention to maintaining debt and spending growth within sustainable levels.

Follow Fin24 on Twitter, Facebook, Google+ and Pinterest.

fitch  |  sa  |  southern africa  |  economy
NEXT ON FIN24X

 
 
 

Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
17 comments
Add your comment
Comment 0 characters remaining
 

Company Snapshot

We're talking about:

Small Business

Retailers of any shape and size can now unlock the power of mobile transacting.
 
 

3 sports games you have to watch this weekend

Whether it’s date night or a braai with buddies, plan around these three exciting sporting games!

 
 

Men24.com

Everyday struggles of naturally skinny guys
And this year's Miss Bumbum title goes to...
How to maintain your mo, bro
Hottie of the day: Colette

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...
Loading...