Facts on S&P's ratings decision on S.A

Standard & Poor's (S&P), the global credit rating agency, recently made a decision regarding South Africa's credit ratings. Gardner Rusike, the Sovereign Credit Analyst for South Africa at S&P, provided insights into the factors that influenced the decision. One key factor highlighted by Rusike was the country's weak economic growth, which has led to downward revisions in growth forecasts. Despite this, S&P noted that South Africa's fiscal consolidation efforts remain on track. The strength of institutions, particularly the judiciary, was also identified as a supportive factor due to its role in providing checks and balances during political tensions. Another significant aspect of the ratings decision was the adjustment in fiscal targets between the government's February budget and the October medium-term budget review. Although slightly weaker, these targets still align with the overall consolidation path. Additionally, the share of the rand in the global foreign exchange market played a role in the change in the local currency rating, with the rating now being one notch below the foreign currency rating. This adjustment reflects a combination of factors that influenced S&P's assessment of South Africa's creditworthiness.