* SP cites structural problems for downgrade
* Re-affirms foreign, local currency ratings
* Downgrade follows similar moves by Moody’s, Fitch
* Treasury rejects political risk assessment
(Adds Treasury reaction)
By Stella Mapenzauswa
JOHANNESBURG, March 28 (Reuters) – SP downgraded South
Africa’s outlook to negative from stable on Wednesday, citing
the potential for a ratings downgrade if economic and social
problems feed into the political debate ahead of 2014 elections.
But the Treasury rejected the ratings assessment of the
political risk in Africa’s biggest economy, saying political
debate should not be confused with instability.
SP said South Africa’s near-term political pressures had
eased and the Treasury remained committed to fiscal
consolidation, but added problems such as high unemployment and
a structural current account deficit persisted.
“The negative outlook reflects the potential for a downgrade
if economic and social problems feed into the political debate
in the run-up to the 2014 elections and consequently further put
pressure on the policy framework,” SP said.
Continued…
