SA not expecting ratings downgrades

Cape Town - South Africa will remain disciplined and stabilise its debt despite cutting its economic growth for 2015, and does not expect to be punished by ratings agencies, Finance Minister Nhlanhla Nene said on Wednesday.

“As we are in a position of stabilising our debt, which is one of the risks, and as we continue to stay the course in terms of fiscal consolidation there would be no reason for a downgrade,” Nene told journalist before tabling his three-year budget outlook.

In its medium term budget policy statement, Treasury warned that a ratings downgrade could trigger foreign capital outflows and sharply higher interest rates.

Given the reliance of Africa's most advanced economy on foreign lending to finance investment, this would have a knock-on effect and could compromise the ability to sustain growth.

Reuters