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Fitch affirms SA's credit rating

The ratings agency has also retained the country outlook at stable.

Picture: AFP.

JOHANNESBURG - Fitch has kept its outlook unchanged at BBB-minus with a stable outlook, while Statistics South Africa has announced that the country's GDP has contracted by 1,2 percent.

In affirming South Africa's rating, Fitch says government efforts to boost growth are likely to have only a marginal impact.

The country plunged into economic turmoil in December after President Jacob Zuma changed his finance minister twice in a week. It has since avoided downgrades from S&P Global Ratings and Moody's, giving policymakers more time to implement reforms to grow the economy, estimated to grow by less than 1 percent this year.

In its statement, Fitch said the 'BBB-' rating reflects low trend GDP growth, significant fiscal and external deficits and high debt levels, which are balanced by strong policy institutions, deep local capital markets and a favourable government debt structure.

"The dismissal of two finance ministers in a week in December, and subsequent tensions between the new Finance Minister Pravin Gordhan and other parts of the government have raised questions about the commitment of the government to sustained fiscal consolidation and prudent governance of state-owned enterprises," Fitch said.

In March, the rand fell when the Hawks said it would launch an investigation into Gordhan's role in setting up a tax surveillance unit in 2007 when he was the commissioner of the South African Revenue Service (Sars).

Gordhan has said the spy unit set up at the tax agency was lawful.

However, last month, the Hawks said there was no investigation into the minister.

Gordhan had said earlier on Wednesday that he was "keeping his fingers crossed" in the countdown to a rating review by Fitch and called for more concrete action to revive the economy.

Additional reporting by Reuters.

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