Ratings agency Standard and Poor’s (S&P) has affirmed South Africa’s long-term credit rating at BBB and local currency credit rating at A-, the National Treasury said on Friday.
“S&P said the negative outlook reflected their view that South Africa’s ratings are constrained by a sizeable current account deficit, which is funded by potentially volatile portfolio flows,” said spokeswoman Phumza Macanda.
“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.”
Macanda said it was government’s view that the rating opinion did not adequately take note of progress made in the issues raised by S&P in its initial downgrades in 2012.
“Government will continue to invest in infrastructure with the view of enhancing the productive capacity of our economy and the competitiveness of our industries.”
Macanda said these investments would be mindful of fiscal sustainability as tabled in the 2013 medium-term budget policy statement.
According to the statement, government committed itself to increasing efficient spending across all government departments.