Bulletin: South Africa Ratings Not Immediately Affected By Announced 2016 Budget

JOHANNESBURG (Standard&Poor's) Feb. 25, 2016--Standard&Poor's Ratings Services said today that its ratings on the Republic of South Africa (foreign currency BBB-/Negative/A-3; local currency BBB+/Negative/A-2; South Africa national scale zaAAA/--/zaA-1) are not immediately affected by the National Treasury's 2016 budget, which it presented on Feb. 24, 2016. The treasury's budget projections are broadly consistent with our base-case assumptions of planned fiscal consolidation, albeit against a sharp downward revision of GDP growth in 2016. However, we note that the budget's ambitious fiscal consolidation targets for 2017-2018 and 2018-2019 aim to reduce fiscal deficits at a faster pace than the treasury previously anticipated. Nevertheless, we consider South Africa's fiscal consolidation remains vulnerable to lower-than-expected GDP growth and shortfalls in

...(Editor's Note: In the bulletin published on Feb. 25, 2016, the ratings on South Africa were misstated. A corrected version follows.) JOHANNESBURG (Standard & Poor's) Feb. 25, 2016--Standard & Poor's Ratings Services said today that its ratings on the Republic of South Africa (foreign currency ###-/Negative/A-3; local currency ###+/Negative/A-2; South Africa national scale zaAAA/--/zaA-1) are not immediately affected by the National Treasury's 2016 budget, which it presented on Feb. 24, 2016. The treasury's budget projections are broadly consistent with our base-case assumptions of planned fiscal consolidation, albeit against a sharp downward revision of GDP growth in 2016. However, we note that the budget's ambitious fiscal consolidation targets for 2017-2018 and 2018-2019 aim to reduce fiscal deficits at a faster pace than the treasury previously anticipated. Nevertheless, we consider South Africa's fiscal consolidation remains vulnerable to lower-than-expected GDP growth and shortfalls...

Bulletin