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Treasury Notes S&P Decision To Affirm SA’s Ratings

Treasury said it has noted ratings agency Standard & Poors (S&P) Global’s decision to affirm South Africa’s ratings.

The agency said the country’s long term foreign and local currency debt ratings remain at BB- and BB respectively – in sub-investment grade.

However, treasury said it notes that the country still has a stable outlook.

S&P Global said South Africa’s fiscal position remains weak, and the large coronavirus related package has further exacerbated fiscal problems.

Ratings agency said the coronavirus fiscal package means the country will have to grapple with a large debt burden as a percentage of GDP.

It also said the economy faces a sharp COVID-19 related contraction.

However, in its response, government said it acted decisively to prioritise the health and lives of all South Africans.

It said it’s now adopted a risk-adjusted approach to reopening the economy, with further easing expected from the beginning of next month.

Treasury said a special adjustments budget will also set out a range of economic reform proposals and measures to stabilise public finances.