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S&P: Political tensions and slow economic growth still 2 major concerns

S&P global says it will continue to assess the overall economic outlook with the next six months critical.

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

JOHANNEBSURG – Standard & Poor’s Global says political tensions and slow economic growth are still two of the major concerns facing the local economy but for now it’s keeping its rating unchanged at BBB-.

The agency has followed Moody’s and Fitch in keeping their overall rating of South Africa unchanged.

But it has lowered its long-term local currency rating to BBB.

It says this is measured at 0.5% for this year and 1.7% for 2017.

S&P global says it will continue to assess the overall economic outlook with the next six months critical.

The agency’s ratings Associate Director Gardener Rusike says, “We first put the negative outlook in the December 2015, so theoretically we can keep the negative outlook for up to 24 months but we’ve to explain the rationale why we’re keeping it.”

Rusike says debt is also a problem.

“That can be a big pressure point for the economic assessment as well as fiscal matrix which need deficits to come down as well as debt stabilising.”

The agency has also cited a number of other problems including political tensions but says higher growth is projected for next year.

At the same time, Treasury has welcomed S&P Global’s decision to keep South Africa’s rating unchanged.

In a statement Treasury says all three rating agencies have retained South Africa at investment grade.

Standard and Poor’s has lowered its long-term local currency rating on South Africa to BBB but has affirmed all other ratings.

(Edited by Leeto M Khoza)