'Challenging economic climate will decrease slightly'
S&P Global Ratings decided to keep its rating for South Africa unchanged at triple b-minus.
JOHANNESBURG - Goolam Ballim, chief economist at Standard Bank, says the challenging economic climate will decrease slightly, enough for ordinary citizens to feel a positive effect of the decision by rating agency Standard and Poor's Global.
Economists agree that the ratings agency's decision to keep the country at triple b-minus, with a negative outlook, is a huge relief for the country.
Ballim says the ratings agency has been clear with respect to areas it thinks needs boosting growth prospects.
"That's helpful because it means that South Africa has a clear set of aspirations that it could target, to put to rest any lingering doubt that South Africa could fall into sub-investment status."
Meanwhile, S&P Global has pointed out South Africa's labour unrest as an "economic weakness".
This warning formed part of the agency's announcement last night.
It says the country's prolonged strikes, high youth unemployment and less flexible labour laws, pose structural weaknesses to the economy.
But S&P's Associate Director Gardner Rusike notes government is trying to implement change in these areas.
"These are among the issues being discussed by government, together with business and the unions, in the fiscal contract. We hope the conclusion of these discussions, which lead to the implementation of these issues, can help reduce the impact of future strikes on the economy."