Rating agency Fitch has revised its outlook on South Africa’s credit rating from stable to negative. It, however, affirmed the country’s long-term foreign and local currency debt ratings at sub-investment grade of BB+.
Fitch has raised concerns about the country’s widening budget deficit due to lower GDP growth and increased spending. Market analyst Liston Meintjies says he’s more concerned about the next rating decision by Moody’s , which is the only rating agency that has kept South Africa on an investment grade.
Meintjies says,”When the Minister of Finance said that he was going to give money to Eskom, everybody said the downgrade is coming. The downgrade we should worry about is Moody’s not Fitch…..it places the pressure on Moody’s to say they are going to capitulate and keep us on sub investment grade. That will be really, the serious one.”
Government’s response to the decision below:
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