Government notes the recent Fitch Ratings announcement to change South Africa’s ratings from stable to negative, as well as Moody’s Investor Service decision to keep South Africa’s ratings unchanged.
“The South Africa economy has demonstrated its resilience in the midst of challenges. However, we have noted the concerns raise by Fitch Ratings and Moody’s Investor Service and Government reassures all stakeholders that it remains committed to achieving the priority of faster, more inclusive growth and employment in order to increase the economic growth trajectory.” said GCIS Acting Director-General Liphoko.
South Africa has sound monetary and fiscal institutions and the country’s fiscal consolidation plans will reduce the budget deficit to 2.4 per cent by 2018/19. The country’s economic reforms and monetary policy is integral in supporting a return to the higher growth rates needed to achieve the National Development Plan’s goals and vision.
Through the implementation of the Nine-Point Plan, new growth opportunities and employment are being unlocked across the economy, through government and business. These include, amongst others, the creation of a R1-billion SME fund to help spur small business development especially in the areas of tourism and agriculture; the oceans economy has the potential to contribute R177billion to GDP and create just over 1 million jobs by 2033; and South Africa’s massive infrastructure investment programme is uplifting economic growth potential and competitiveness.
Government’s 2015/16 Industrial Policy Action Plan prioritises the development of industries supplying the infrastructure build programme, energy, transport, oil and gas, and water and sanitation.
Liphoko added that the ratings review affirms the importance of government and all sectors of society working together as a collective to turn the economy around. “Citizens can play their part by increasing their savings and avoiding debt, especially as we head towards the festive season. Working together, our efforts will make our economy stronger.”
The National Development Plan indicates that effective partnerships will enable the advancement of an inclusive economy which addresses the triple challenge of unemployment, poverty and inequality. “Government’s announcement of a One-Stop Shop (Invest SA) for investment in South Africa is one such partnership that makes it easier to do business in the country,” said Liphoko.
The decisions of the ratings agencies recognize South Africa’s commitment to sound macro-economic policies and its strong institutions. Government remains committed to working with all citizens and sectors of society towards the realization of the 2030 Vision.
Issued by Government Communications (GCIS)
25 November 2016