Africa to A- outlook table
22 December 2006
The Rating and Investment Information (R&I) Rating Agency from Japan has
upgraded the Republic of South Africa's foreign currency long term rating to A-
(A minus) with a stable outlook (upgraded from stable BBB+). The foreign
currency short term rating has also been upgraded from A-2 to A-1.
The upgrade is supported by the following factors:
* Economic growth of about four to five percent is expected to continue over
the Medium Term Expenditure Framework (MTEF).
* Tax revenue is increasing given a well established tax collection system and
the fiscal deficit as a percentage of gross domestic product (GDP) has declined
to less than one percent.
* Public debt is on a declining trend and is expected to fall to 34 percent of
GDP in 2007.
* The import of capital goods accompanying domestic investment in
infrastructure development is increasing and capital inflow is sound and no
immediate concerns exist regarding foreign currency financing.
* The R&I Rating Agency have also newly assigned the Domestic Currency
Issuer Rating at A.
The upgrade given by R&I rating agency is a reflection of government's
programme to continually prioritise the needs of the poor made possible by the
improved economic growth on the strength of sound macroeconomic, fiscal and
monetary policies, sound debt management and the continued expansion in public
expenditure. South Africa is now reaping the benefits of economic restructuring
and policy reforms over the past decade and is now one of a few emerging
economies to have reached an A international credit rating. This improved
rating will further reduce South Africa's external vulnerability as well as its
sovereign risk premium and thereby reduce the cost of doing business.
Enquiries:
Anthony Julies
Chief Director: Strategy and Risk Management
Tel (012) 315 5415
Cell: 082 941 5394
E-mail: Anthony.Julies@treasury.gov.za
Johan Schoeman
Director: Foreign Debt
Tel: (012) 315 5815
Cell: 082 908 3734
E-mail: Johan.Schoeman@treasury.gov.za
Thoraya Pandy
Cell: 082 416 8416
Issued by: National Treasury
22 December 2006
