{"id":9401,"date":"2012-03-28T15:37:16","date_gmt":"2012-03-28T13:37:16","guid":{"rendered":"http:\/\/www.myza.co.za\/03\/text-sp-revises-south-africa-outlook-to-negative\/"},"modified":"2012-03-28T15:37:16","modified_gmt":"2012-03-28T13:37:16","slug":"text-sp-revises-south-africa-outlook-to-negative","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/text-sp-revises-south-africa-outlook-to-negative\/","title":{"rendered":"TEXT-S&P revises South Africa outlook to negative"},"content":{"rendered":"

\t\t<\/span><\/p>\n

<\/span><\/p>\n

<\/span><\/p>\n

Rationale<\/p>\n

<\/span><\/p>\n

The negative outlook reflects the potential for a downgrade if economic and social problems
\nfeed into the political debate in the run-up to the 2014 national and provincial elections and
\nconsequently further put pressure on the policy framework.<\/p>\n

<\/span><\/p>\n

We consider that South Africa’s near-term political pressures have diminished since the
\nAfrican National Congress (ANC) has put the leadership of its youth league, which advocated
\nnationalization of the country’s mining sector, through a disciplinary process. We also think
\nthat South Africa’s Treasury remains committed to further gradual fiscal consolidation,
\nstabilizing its debt levels that have grown strongly since 2009.<\/p>\n

<\/span><\/p>\n

However, fundamental structural economic and social problems, such as low per capita growth
\nestimated at 2.1% in 2012 and very high unemployment rates, persist, and South Africa’s
\nstructural current account deficit makes the economy dependent on external financing.<\/p>\n

<\/span><\/p>\n

Draft policy documents expected to be discussed ahead of the ANC national conference in
\nDecember 2012 support our expectation that there will be no abrupt shift in the party’s
\npolicies, despite continued debates ahead of the conference. This is because of the party’s
\nchecks and balances, the allocation of key positions to the centrist wing, and the economy’s
\nexposure to market sanctions. Nevertheless, we think that looming economic and social pressures
\ncould gradually affect the country’s policy framework. In the run-up to the 2014 elections, the
\nANC’s centrist wing may make gradual concessions to the more populist expectations from within
\nand without the party.<\/p>\n

<\/span><\/p>\n

Deterioration in the global economic environment could add pressure given that exports of
\ngoods and services amount to about 30% of GDP and that the country runs persistent current
\naccount deficits, which we estimate will be about 4% of GDP in 2012. We expect that nearly
\none-half of the current account deficit will be funded by net foreign direct investment, and the
\nother half through an increase in external debt, as was the case in 2011. This is because
\nportfolio equity continues to be a net outflow.<\/p>\n

<\/span><\/p>\n

Standard Poor’s ratings on South Africa are supported by our view of the country’s stable
\npolitical environment and transparent institutions. Its moderate fiscal and external debt afford
\nSouth Africa fiscal and monetary flexibility, as seen in the country’s successful use of
\nmacroeconomic policies to cushion the burden of the recent global economic downturn.<\/p>\n

<\/span><\/p>\n

The ratings are constrained by South Africa’s multiple development needs and social
\nchallenges, which we think may have long-term ramifications for policy and may raise fiscal
\nexpenditure pressures. Supply shortages–includinginfrastructure bottlenecks and labor market
\nrigidity and skill shortages–constrain South Africa’s growth potential.
\n\u00a0 Continued…<\/strong><\/span><\/p>\n

<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Rationale 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 national and provincial elections and consequently further put pressure on the policy framework. We consider that South Africa’s near-term political pressures have diminished since the African National Congress (ANC) […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","ngg_post_thumbnail":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[1],"tags":[830,2370,183],"class_list":{"0":"post-9401","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-south-africa","7":"tag-news","8":"tag-reuters","9":"tag-south-africa-2","10":"entry"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9401","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/comments?post=9401"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9401\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=9401"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=9401"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=9401"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}