JOHANNESBURG Jan 13 (Reuters) – Fitch cut South
Africa’s rating outlook to negative from stable on Friday,
saying it had seen limited progress on several long-standing
structural issues that have over time caused the country’s
economic performance to fall behind its peers.
The rand fell 1.5 percent against the dollar after
the move, while South Africa’s 5-year credit default swaps rose
10 basis points.
Fitch, which has a BBB+ rating on South Africa, said the
country’s inability to create jobs, with an unemployment rate of
around 25 percent, was putting pressure on growth and narrowing
the tax base.
The ratings agency said the country’s external finances,
though still better than its peers, were deteriorating and a
failure to accelerate growth would weaken the country’s credit
fundamentals.
(Reporting by Xola Potelwa; Editing by Susan Fenton)
© Thomson Reuters 2012 All rights reserved
