S&P holds off on further credit downgrade for SA
Government says it has noted S&P’s decision on Friday to affirm South Africa’s long term foreign and local currency debt ratings at ‘BB-’ and ‘BB’ respectively and maintain a stable outlook.
In a statement, it says it means the country’s credit ratings by S&P remain non-investment grade
In April, the same ratings agency lowered the country's credit rating out of it's normal schedule due to the "significant adverse implications" of the coronavirus pandemic on the country's already-weakened economy.
ALSO READ: Treasury on Moody's SA credit rating downgrade: 'It could not have come at a worse time'
According to S&P, South Africa’s fiscal position remains weak, and a large Covid-19 Coronavirus related fiscal package has further exacerbated fiscal problems, which means the country will have to grapple with a large debt burden as a percentage of GDP, and
substantial contingent liabilities.
"Furthermore, the economy faces a sharp COVID-19-related contraction," adds Treasury.
It noted though that "the stable outlook reflects the balance between pressures related to very low GDP growth and high fiscal deficits against the country’s deep financial markets and monetary flexibility."
Treasure goes on to say that government has acted decisively to prioritise the health and lives of all South Africans.
"Furthermore, government’s R500-billion fiscal support package alongside the monetary policy response will provide substantial support to the economy."
In June 2020, a special adjustments budget will be tabled by the Minister of Fiance and is expected to include a range of economic reform proposals and measures to stabilise public finances.