Johannesburg | Monday
INTERNATIONAL rating agency Standard & Poor’s said on Monday it was unlikely to upgrade South Africa’s credit rating in the absence of improved economic growth and labour relations.
Standard & Poor assigned South Africa a stable outlook rating last year, while Moody’s placed the country on positive ratings watch.
Finance Minister Trevor Manuel and National Treasury director general Maria Ramos now believe the country is due for an upgrade later this year, based on progress on investment, privatisation and infrastructure spending.
”We have seen further progress in fiscal consolidation… but if you think of economic performance, economic growth has been uninspiring over the last 12 to 18 months,” said Konrad Reuss, a S&P managing director in charge of South African rating.
”The performance of the labour market has been uninspiring. As far as our thinking is concerned, certainly a few things would have to happen before we see a strong upside potential for the rating,” he said.
Moody’s declined to comment saying it was against the company’s policy.
South Africa’s economy expanded 3,2% in 2000 from 1,9% in 1999, but was seen struggling to reach the 5% growth rate considered necessary to start absorbing millions of the country’s unemployed. – Reuters
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