SA's economic woes: S&P Global concerned about growth

The S&P Global logo is seen outside a building in Washington, DC. AFP/Alastair Pike

JOHANNESBURG - Ratings agency S&P Global says South Africa's credit rating could slip further into junk status if it fails to bring about a rebound in economic growth.

The agency said it's particularly worried about the country's fiscal challenges and increasing debt.

READ: Moody's move SA to junk status 

It has also flagged rule of law and uncertainty around property rights as concerns.

S&P Global is one of three major ratings agencies that hold the country in sub-investment grade.

READ: Ratings downgrade will hit consumers hard

A lower grading negatively affects the cost of borrowing and hurts investor sentiment.

S&P Global sovereign ratings director Ravi Bhatia said South Africa still has a number of strengths.

"A very credible central bank. A flexible exchange rate and actively traded currency and deep domestic capital markets, so those are all strengths but this is [a] counterbalance to provide what I mentioned."

Source
eNCA

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