Pretoria - National Treasury says it has noted Standard and Poor’s (S&P) decision to affirm the country’s long term foreign currency credit rating at “BBB” and local currency credit rating at “A-2”.
The rating agency maintained the negative credit outlook on the rating.
According to S&P, the ratings affirmation is based on the following factors: government will ensure broad, largely pragmatic, policy continuity; tensions in the mining sector have reduced; GDP growth remains lacklustre; current account deficits are relatively high; general government debt is sizable and portfolio flows are relatively volatile.
According to S&P, South Africa's recent lacklustre economic performance, external imbalances, and labour tensions could affect its macroeconomic policy framework beyond the agency’s expectations.
“Government’s view is that S&P’s rating opinion did not take adequate account of progress made in addressing the issues that S&P had raised as potential drawbacks to their initial downgrades in 2012,” National Treasury said on Friday.
Treasury said government will continue to invest in infrastructure with the view of enhancing the productive capacity of the economy and the competitiveness of local industries.
“This will be done in a manner consistent with fiscal sustainability as tabled in the 2013 Medium Term Budget Statement,” said Treasury. - SAnews.gov.za
