S&P's decision is in line with expectations that it would adopt a wait-and-see approach after the general elections
S&P Global Ratings kept its rating unchanged on Friday, giving President Cyril Ramaphosa leeway to move forward with reform.
"The stable outlook reflects our view that, with the elections now over, the South African government will pursue some reforms and attempt to improve economic growth and try and contain fiscal deficits," S&P said in a statement on Friday night. The credit rating agency warned that it could lower the ratings if SA continued to see higher expenditure pressures, contingent liabilities manifest and if the economy weakened. It also warned of a downgrade if the rule of low or property rights were infringed on. However, SA could see an upgrade if economic growth and fiscal outcomes strengthened above current projections.
S&P was the first of the big three ratings agencies to react when former president Jacob Zuma fired respected finance minister Pravin Gordhan in a surprise cabinet reshuffle on March 31 2017. S&P cut SA’s foreign-currency bonds to junk status three days later. Fitch followed suit four days after S&P.
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