{"id":9483,"date":"2012-03-30T15:41:37","date_gmt":"2012-03-30T13:41:37","guid":{"rendered":"http:\/\/www.myza.co.za\/03\/text-sp-summary-south-africa-republic-of\/"},"modified":"2012-03-30T15:41:37","modified_gmt":"2012-03-30T13:41:37","slug":"text-sp-summary-south-africa-republic-of","status":"publish","type":"post","link":"https:\/\/www.myza.co.za\/press\/text-sp-summary-south-africa-republic-of\/","title":{"rendered":"TEXT-S&P summary: South Africa (Republic of)"},"content":{"rendered":"

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

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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–including infrastructure bottlenecks and labor market
\nrigidity and skill shortages–constrain South Africa’s growth potential. The ratings are also
\nconstrained by continuous current account deficits, the funding of which depends significantly
\non potentially volatile portfolio flows, exposing the economy to a sudden shift of flows due to
\nchanges in global risk appetite, or to rapid market sanctions in the event of policy slippage.<\/p>\n

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

We consider South Africa to be a middle-income country with a diverse economy but wide
\nincome disparities. We estimate per capita GDP at $7,800 for 2012.<\/p>\n

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

In our view, South Africa’s gradual fiscal consolidation, which targets a general government
\ndeficit of 3% of GDP by 2014, is vulnerable to public sector wage increases and multiple
\ndevelopment needs and social challenges. We anticipate the 2011 fiscal year ending March 31,
\n2012, will close with a general government deficit of 4.8% of GDP, which is better than
\nbudgeted. The improvement stems in part from underspending on capital projects.<\/p>\n

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

General government debt has approximately doubled since 2008, and the debt burden has risen
\nby a little more than 10% of GDP. We expect gross general government debt to stabilize at just
\nunder 43% of GDP over the next three years. We estimate gross public sector debt (including
\nnonfinancial public enterprises) to increase to 52% of GDP at the end of fiscal 2011, and to
\nfurther increase to 58% of GDP by 2014, a significant increase compared with 35% in 2008. This
\nis because of increased borrowing by state-owned entities to address infrastructure gaps.<\/p>\n

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

We estimate the country’s net external liability position will widen to 73% of current
\naccount receipts this year, but the prevalence of equity funding has kept net external debt
\n(excluding liquid assets) low at an estimated 12% of current account receipts this year. We
\nexpect infrastructure investment to result in a rising external debt burden in the next few
\nyears, but we also expect the country’s export capacity to improve.<\/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 national and
\nprovincial elections, the ANC’s centrist wing may make gradual concessions to the more populist
\nexpectations from within and without the party.
\n\u00a0 Continued…<\/strong><\/span><\/p>\n

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

The ratings are constrained by South Africa’s multiple development needs and social challenges, which we think may have long-term ramifications for policy and may raise fiscal expenditure pressures. Supply shortages–including infrastructure bottlenecks and labor market rigidity and skill shortages–constrain South Africa’s growth potential. The ratings are also constrained by continuous current account deficits, the funding […]<\/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-9483","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\/9483","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=9483"}],"version-history":[{"count":0,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/posts\/9483\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/media?parent=9483"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/categories?post=9483"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myza.co.za\/press\/wp-json\/wp\/v2\/tags?post=9483"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}