Johannesburg – The South African government has acknowledged Standard and Poor’s (SandP) Global Ratings’ recent decision to maintain the nation’s long-term foreign and local currency debt ratings at ‘BB-‘ and ‘BB’, respectively, with a stable outlook.
According to South African Government News Agency, the stable outlook is a balance between South Africa’s credible central bank, flexible exchange rate, liquid currency, and deep capital markets, against the growth pressures related to infrastructure and potential risks to the fiscal and debt situation. SandP also noted the uptick in private-sector investment in power generation and renewables, which is expected to bolster real Gross Domestic Product (GDP) growth in the medium term.
National Treasury has stated that for the next three years, the government’s focus will be on increasing GDP growth by enhancing the provision of electricity and logistics, delivering infrastructure effectively, and restructuring the state to improve efficiency. Fiscal policy, as articulated by the department, aims to stabilize debt and service costs, with fiscal consolidation to be achieved through spending cuts, government-wide efficiency improvements, and moderate tax revenue measures.