International credit rating agency Standard & Poor’s (S&P) lowered South Africa’s sovereign rating outlook from “positive” to “stable.”
According to Reuters on the 9th (local time), S&P lowered its rating outlook late in the afternoon of the previous day, citing South Africa’s serious power crisis, and maintained its national credit rating of ‘BB-/B’, a speculative rating (junk).
However, S&P warned that the South African government could lower its rating further if there is no progress in its plan to resolve the power shortage.
S&P said South Africa’s real GDP growth forecast for this year is also expected to grow 1.7% on average between 2024 and 2026, lowering it from 1.5% to 1%.
They added that the real GDP growth rate was 2% last year.
The S&P pointed out in the report that “the downside risk to the outlook is still prominent because South Africa has not been able to fully utilize the rise in global consumer goods prices due to the ongoing power shortage.”
South Africa’s finance ministry acknowledged S&P’s decision and reiterated its promise to address the power shortage that has made Africa’s most industrialized economy difficult for more than 15 years, the news agency said.
In South Africa, the chronic power shortage has worsened recently, leading to a daily cycle of disconnection (road shading), which requires 6 to 12 hours of disconnection a day.
According to major foreign media on the 9th (local time), S&P lowered its rating outlook late in the afternoon of the previous day, citing South Africa’s serious power crisis. South Africa’s sovereign credit rating remained at ‘BB-/B’, a speculative rating (junk).
S&P warned that the South African government could lower its rating further if it fails to make progress in resolving the power shortage. As South Africa’s chronic power shortage has worsened recently, the circulation disconnection (road shading) continues every day, which requires 6 to 12 hours of disconnection a day.
