Another international credit rating downgraded South Africa’s government debt to deeper into junk status.
Standard & Poor’s Global Ratings (S&P) rating for foreign and domestic government debt was lowered to BB and BB respectively.
The Treasury said late last night it was aware of the decision to further downgrade the country’s public debt and was disappointed in it, especially as it came while South Africa was experiencing one of its toughest times yet.
“The downgrade is a result of the pressure associated with the coronavirus, which has significant negative implications for South Africa’s already poor economic growth and fiscal situation,” states the Treasury statement.
However, the agency has changed its outlook for the upcoming rating from negative to stable.
The Treasury believes this indicates that S&P recognizes government’s fiscal and monetary policies.
Economists have predicted that since the end of March South Africa will be downgraded to junk status in the coming months by S&P and Fitch Ratings.
Moody’s Investors Service eventually downgraded South Africa to below investment grade.