Foreign

Fitch downgrades South Africa’s credit rating

CLICK TO DOWNLOAD BOBOJAYTV ANDROID APP
Send eyewitness, adverts & inquiries >>> +2349138493600 Telegram: t.me/bobojaytv Email: reports@bobojaytv.com

Ratings agency Fitch downgraded the outlook for South Africa’s sub-investment credit rating on Friday, citing fiscal pressures including increased support for struggling state firms such as the power utility Eskom.

South Africa’s public finances are under huge strain as economic growth has proved weaker than expected while a handful of state companies have needed large government cash injections.

The government this week proposed giving Eskom 59 billion rand ($4.1 billion) of additional financial support over the next two years, on top of an already-promised bailout of 230 billion rand spread over the next decade.

Downward revisions to GDP growth in 2019 also raise new questions about South Africa’s GDP growth potential.

Fitch now rates South Africa’s debt at ‘BB+’, a notch below investment grade, with a negative outlook.

Related Posts

The firm said it forecast the consolidated general government deficit would widen to 6.3% of gross domestic product (GDP) in the current fiscal year, from 4.2% last year.

In a statement that also highlighted political risks, Fitch said: “Continued infighting within the African National Congress is likely to draw attention away from policy making.”

“Downward revisions to GDP growth in 2019 also raise new questions about South Africa’s GDP growth potential,” it added.

The Finance Ministry said it was aware of the risk that state firms such as Eskom presented and that it was developing a broad strategy for Eskom’s future.

Eskom is expected to publish financial results next week which will show the extent of the crisis at the utility.

ALSO READ   Zimbabwean doctor who survived suspected kidnapping leaves for SA

 

 

Follow us Facebook |Twitter | Instagram | Join Facebook Group for daily news updates

Disclaimer: Opinion and comments are solely the responsibility of the author and does not necessarily reflect the views of the publishers.

Related Posts

Leave a Reply

Back to top button
BOBOJAY TV BOBOJAY TV Would you like to receive notifications on latest updates? No Yes