Publications
Partners
Cape Town - Rating agencies will take the political situation in South Africa into account when reviewing its credit rating, Finance Minister Pravin Gordhan said on Tuesday, after parliament voted against impeaching President Jacob Zuma.
"Politics, economics and the fiscal situation are all things ratings agencies watch out for. South Africans should be aware of that," Gordhan told Reuters.
This comes as Standard & Poor's told a conference on Wednesday that South Africa's economic growth had been underperforming even before the severe drought and the global fall in commodity prices.
"It shows that, looking forward, growth opportunities will have to be found domestically," S&P's chief European economist Jean-Michel Six said at a conference in Johannesburg.
On Monday, emerging markets economist Peter Montalto of Nomura told Fin24 that the political dynamic is likely to be confusing for the rating agencies.
“On the one hand the ability of the Constitutional Court to hand down (the Zuma/Nkandla) judgment will be seen as ratings positive, but the political manoeuvrings and spin are likely to be seen as ratings negative,” he said.
He said a long, managed exit of Zuma as president through to January 2018 would allow downgrades to proceed, whereas an immediate exit could pause downgrades until next year.
