South Africa's economic growth continues to remain well below most emerging market peers on a per capita basis. With the elections over, the government is likely to focus more on new policy initiatives that will aim to support firmer economic growth and reform state-owned enterprises. South Africa's fiscal position remains weak, with sizable fiscal deficits, a large debt burden, and sizable contingent liabilities, with the latter largely tied to the energy utility Eskom. We consider South Africa's monetary flexibility, the freely floating exchange rate, and the country's deep financial markets to be significant credit strengths. South Africa's financial sector is largely profitable and well capitalized, although partially reliant on short-term funding. The stable outlook reflects our view that, with the
