Johannesburg –S&P Global Ratings has lowered South Africa’s sovereign credit further into non-investment grade or junk, citing the impact of Covid-19 on the country’s already struggling economy.
The rating agency announced that it had downgraded SA’s long-term foreign-currency credit rating to ‘BB-’, or the third tier of non-investment grade. S&P said SA’s “already contracting economy will face a further sharp Covid-19 related downturn in 2020”.
The agency is now expecting SA’s economy to shrink by 4.5% this year which is still more bullish than the 6.1% contraction projected by the SA Reserve Bank.
In a statement, National Treasury said it was disappointed by the decision to cut the sovereign rating “at a time when South Africa is facing one of its most challenging times.”
This rating by S&P comes just after a month since Moody’s downgraded SA’s sovereign credit rating to just, citing a SA’s deteriorating fiscal strength and “structurally very weak growth”.