Cape Town – South Africa is living beyond its means, and the country may reach a level of 60% debt to GDP in a few years’ time.
So says economist Mike Schüssler in an opinion piece written for TreasuryOne. This has not gone unnoticed by the major rating agencies, and Schüssler says “concern that South Africa is living beyond its means is coming over loud and clear. Government is likely to have a deficit of over 4% for this year and next year will be close to that as well.”
South African ratings are inching towards the bottom end of investment grade ratings, says Schüssler. Standard and Poor’s, Moody’s and Fitch, which make up nearly 95% of US and European ratings, are slowly dropping SA’s grade lower and lower.
His biggest current concern, says Schüssler, is the likely downgrade of SA by two of the three major rating agencies in the next year – “but more probably in the next nine months”…
South Africa Today – South Africa News
