In our view, the strikes in South Africa's mining sector will likely feed into the political debate in the run-up to the 2014 elections, which may increase uncertainties related to the African National Congress' (ANC's) future policy framework. We also expect South Africa's underlying social tensions to increase government spending pressure and reduce its fiscal flexibility. We now expect GDP growth to soften to not more than 2.5% in 2012, and the current account deficit to increase to at least 5.1% of GDP. We are therefore lowering the long-term foreign currency sovereign credit rating on South Africa to 'BBB' from 'BBB+', and the long-term local currency rating to 'A-' from 'A'. The negative outlook reflects our view that the medium-term
