S&P downgrades South Africa

S&P said it lowered its long-term foreign currency sovereign credit rating on the Republic of South Africa to BB from BB+ and affirmed the B short-term foreign currency sovereign credit rating. The outlook is stable.

At the same time, the long-term local currency sovereign credit rating was lowered to BB+ from BBB- and the short-term local currency sovereign credit rating was lowered to B from A-3. The outlook is stable.

S&P said it also lowered the long-term South Africa national scale rating to zaAA+ from zaAAA and affirmed the short-term national scale rating at zaA-1+.

“The downgrade reflects our opinion of further deterioration of South Africa's economic outlook and its public finances.

“In our view, economic decisions in recent years have largely focused on the distribution – rather than the growth of – national income. As a consequence, South Africa's economy has stagnated and external competitiveness has eroded,” S&P said in a news release.

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