Analysts: SA still at risk of a credit downgrade

This week ratings agency Standard & Poor’s Global warned South Africa's sovereign credit rating still hangs in the balance.

Picture: EWN.

JOHANNESBURG – Some analysts say South Africa is still at risk of a credit downgrade but it may not necessarily be due to economic factors.

This week ratings agency Standard & Poor’s Global warned South Africa's sovereign credit rating still hangs in the balance.

Last year, the country managed to avoid a downgrade to junk status.

Economist Isaac Matshego says there are a number of factors that need to be considered.

“This year is going to be very busy politically because the African National Congress (ANC) is heading for an elective conference which could see some changes in government and that will not help the implementation of policies, increasing the risk of credit downgrading significantly.”

The credit ratings agency became the last agency to make its announcement late last year.

It kept the country at one level above junk status with a negative outlook, but has warned government to kick economic growth into gear to avoid sub investment grade in the future.

It has also flagged political tensions as a cause for concern.

The agency said South Africa needs to keep its growth above 1% to avoid a possible downgrade in the future.

(Edited by Leeto M Khoza)