S&P changes South Africa to negative

Standard & Poor's said it revised the outlook on the Republic of South Africa to negative from stable.

The agency also affirmed its long- and short-term foreign currency sovereign credit ratings at BBB-/A-3, the long- and short-term local currency ratings at BBB+/A-2 and the South Africa national scale ratings at zaAAA/zaA-1.

S&P said the outlook revision reflects South Africa’s still-slow pace of economic growth, which the agency revised down further to 1.4% for 2015 from its June estimate of 2.1%.

This is due to a combination of weak external demand, with low commodity prices and domestic constraints including an inadequate electricity supply and overall weak business confidence inhibiting substantial private sector investment. This highlights a prolonged period of low growth for a country with per capita GDP of just below $6,000 in 2015 and population growth averaging at least 1.5% over the last six years, the agency said.

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