JOHANNESBURG – Ratings agency S&P Global’s South Africa analyst said on Thursday there was no immediate pressure to change the country’s sovereign rating, despite weak economic growth and a growing debt burden.
Africa’s most industrialised economy is ranked at sub-investment grade by S&P and Fitch, two of the three main ratings firms, with recent downgrades linked mainly to the weak economy, bailouts for state firms and concerns about governance and corruption.
S&P Global’s long-term foreign-currency rating for South Africa’s debt is ‘BB’. Its stable outlook is one reason why analyst Gardner Rusike told a ratings conference that the rating was unlikely to change soon.
“We don’t believe that there is immediate pressure to change the ratings in the near term,” Rusike said.
He added that S&P Global saw South Africa’s economic growth rate this year at below 1% and would look for measures to contain fiscal slippage in the finance ministry’s medium-term budget statement on Oct. 30.
Rusike said a recent government bailout to state power firm Eskom would put pressure on the budget deficit but that as a once-off event it did not pose a danger to the country’s sovereign rating.