S&P slashes South Africa rating further into 'junk'Staff Writer | November 25, 2017
S&P Global Ratings lowered South Africa's credit rating further into "junk" territory on Friday, citing the country's deteriorating public finances and weak economic growth outlook.
Africa S&P dropped South Africa to "BB"
S&P dropped South Africa long-term foreign currency sovereign rating to "BB" after having placed it higher in the speculative category at "BB+" in April.
"Weak GDP growth has led to further deterioration of South Africa's public finances beyond our previous expectations," S&P said.
"We think the government will attempt to introduce offsetting measures in an effort to improve budgetary outcomes, but these may not be strong enough to stabilise public finances, and may weaken economic growth further in the near term."
"In our view, economic decisions in recent years have largely focused on the distribution - rather than the growth - of national income," S&P added. "As a consequence, South Africa's economy has stagnated and external competitiveness has eroded."
S&P said its outlook on South Africa is "stable," meaning credit metrics are not expected to change significantly over the next year. ■