The government was committed to addressing the concerns identified in Fitch’s Rating review, National Treasury said last night. It said Fitch Ratings had earlier announced that it had affirmed the country’s long-term foreign and local currency Issuer Default Ratings (IDRs) at ‘BBB’ and ‘BBB+’ respectively. “Fitch has also affirmed South Africa’s outlook at stable,” National Treasury said in a statement.
“Among positive factors influencing Fitch’s ratings affirmation were a strong banking system and deep local capital markets.” The ratings agency had reportedly said that government debt was largely denominated in local currency and had a high average maturity and limited exchange rate and financing risk. “Fitch also indicated that weak economic growth and a widening current account deficit were downside drivers preventing the economy from achieving a more positive rating,” said Treasury. “The National Treasury considers Fitch’s decision fair in view of the global economic climate and the South African government’s commitment to its counter cyclical fiscal policy stance.”
It said government’s fiscal framework was aimed at re-prioritising expenditure and revenue, while providing support to the economy and strengthening infrastructure investment for sustainable long-term growth across all critical sectors of the economy.