SA’s renewed commitment to fiscal consolidation, windfall mining revenue and an upward revision to GDP should help it avert a deeper junk credit-rating on Friday and set it on course to regain at least one investment-grade assessment within the decade.
WhileSA’s finances remain shaky,finance minister Enoch Godongwana’s commitment last week to rein in debt, reduce loan-servicing costs, narrow the budget deficit and cut spending in the coming year should help bolster investor confidence. The medium-term budget was the clearest sign yet that the former labour unionist and head of economic transformation of the ruling ANC won’t give in to calls to scale back austerity measures.
Ratings companies are likely to “share general investor concern that debt stabilisation will remain challenging until trend growth is credibly and sustainably higher, particularly given elevated demands for poverty relief,” said Elna Moolman, an SA economist at Standard Bank Group.
I thought Ramaphosa was your savior
Could.