Rating agencies more upbeat on SA economy, but warn that global risks are still a concern

Rating agency Standard & Poor’s offered a more upbeat outlook for the South African economy owing, in part, to some opportunity for successful spin-offs from the Soccer World Cup, which ended last night.

S&P’s managing director for South Africa and sub-Saharan Africa, Konrad Reuss, said that growth in the country has returned at “an astonishing rate” and that the World Cup should help to add “some impetus and momentum to the robust pace”. Reuss said that there was also further positive news for the fiscal side of the economy when it came to revenue intake, while the World Cup could also help in terms of capital flows and investment into the country.


S&P currently has an investment grade rating of BBB+ on SA with a Negative Outlook. Rating agency Fitch (which has the same rating and outlook) was a little more cautious on the outlook for the economy, however. Sovereigns director Veronica Kalema said that a ratings upgrade for SA was “out of the question” due to there still being too many global risks. However, Kalema said South Africa’s Negative Outlook could change “if the pick up in economic growth was sustained”.

Source: Absa Bank