Will Fitch follow suit in affirming SA’s credit rating?

Economists are optimistic that Fitch will keep SA’s rating unchanged -but may lower its outlook to negative.

Picture: AFP.

JOHANNESBURG - Ratings agency Fitch is expected to publish its review today, with economists hopeful that it will affirm South Africa's credit rating.

The country dodged downgrades by both Moody's and Standard & Poor's Global recently, but government has been urged to implement reforms before the end of the year if the country is to avoid a recession.

At the same time, business confidence has plummeted to an all-time low as the country grapples with slow economic growth.

Economists are optimistic that Fitch will keep the country's rating unchanged, but may lower its outlook to negative.

Last month Fitch's Jan Firederich indicated that there are some challenges when it comes to South Africa's rating.

In its last review, released in December - before President Jacob Zuma swapped his finance ministers - Fitch said it had expected South Africa's economy to grow by about 1.7 percent this year.

S&P on Friday said it was sticking to its BBB rating on South Africa, one notch above non-investment grade.

But it warned that its negative outlook reflected the potential adverse consequences of low GDP growth.

Last month, Moody's kept its rating at Baa2.

The rand and government bonds jumped after the S&P review, with the currency trading 0.3 percent firmer, while the benchmark bond due in 2026 and the country's dollar-denominated bonds firmed.

Rating agencies had warned of possible cuts to South Africa's credit standing after Zuma rattled investors by changing finance ministers twice in less than a week in December, triggering a cross-asset selloff.


Meanwhile, President Jacob Zuma has said he's satisfied with the work being done to improve the country's economy.

Yesterday, Zuma met with Finance Minister Pravin Gordhan.

The Presidency's Bongani Ngqulunga says, "The president and the minister are quite happy about the meeting that they've had and they will be working together as they've been doing in the last couple of months to galvanise different stakeholders in our society to work together on turning around the economy and creating jobs."

He says, "The president is very pleased with the briefing he got from the minister."