Another credit rating hurdle awaits SA

S&P Global currently rates the country one notch above junk status and it’s hoped that South Africa can avoid a downgrade.

Credit rating agency Standard & Poor's. Picture: AFP

CAPE TOWN – Some experts say even if South Africa manages to stave off a credit rating downgrade by Standard & Poor’s Global on Friday, it would be just one hurdle the country needs to clear to get economic growth back on track.

S&P Global has South Africa at BBB minus with a negative outlook, which is one level above sub-investment grade.

Moody’s and Fitch have already announced they will be keeping their ratings unchanged, but Fitch adjusted its outlook to negative.

S&P Global rates the country one notch above junk status and it’s hoped that the country can avoid a downgrade.

Chief Economist at Econometrix Azar Jammine says if South Africa is spared from a downgrade it simply staves off what he calls 'the evil day'.

“Are we going to see greater cooperation between workers and employers, especially bearing in mind the fact that so little had been done to reduce the gap between executive remuneration and the ordinary working class.”

Nedbank's chief economist Dennis Dykes says: “Both Moody’s and Fitch put it very clearly when they said that politics and policy are holding us back from structural reform, which will lead to economic growth. So, it’s all around that at the moment.”

Both experts admit Friday’s decision could go either way.

(Edited by Tamsin Wort)