Fitch: Gordhan comeback doesn’t remove all uncertainty
Fitch Ratings said on Monday that the merry-go-round at the South African finance ministry raised questions over the direction of economic policy, and said all eyes would be on February’s budget as an opportunity to show the government’s commitment to prudent management of the public finances.
The ratings agency that downgraded South Africa’s sovereign rating to one level above junk the week before last said it viewed the nominal non-interest ceiling, which the government had met since 2012 and Gordhan on Monday described as “sacrosanct”, as an important pillar of fiscal discipline.
While welcoming the content of Gordhan’s speech, Fitch said his reappointment did not remove all the uncertainty generated during this turbulent week over government effectiveness and the coherence and credibility of economic policy.
The statement added: “As we said last week, change in leadership at the Treasury would be relevant to our sovereign rating assessment if it led to a loosening of fiscal policy or weakening in the transparency and financial management of state-owned companies, which represent a contingent liability to the sovereign.” –
ANA
(File photo)