On Friday, the 26th of July 2019, Fitch Ratings Inc., widely called as one of the Big Three Credit Rating Agencies, headquartered in New York, had downgraded outlook for the South Africa’s sub-investment credit rating, citing mounting fiscal pressures on Africa’s second-largest economy with a GDP of $12,143.47 per capita in terms of purchasing power parity (PPP) and a nominal GDP of $6,509 per capita by Q4, 2018.
Followed by downgrading outlook for South Africa’s credit on Friday (July 26th), US-based rating agency Fitch had been quoted saying in a report that heightening government’s aid to support struggling state firms likes of Eskom had been ratcheting up pressure on Africa’s second-largest economy.
Aside from that, addressing to a weaker-than-expected economic growth during first quarter of the year, Rating Agency Fitch said that a basket of state-controlled companies was in dire need of cash injections, eventually impact of which would add further strain on the nation’s public finances.
In point of fact, earlier this week, South African government had proposed a $4.1 billion (59 billion South African Rand) package in financial support over the next couple of years aside from an already-promised bailout of 230 billion South African Rand.
As inshort-range, Fitch settled South Africa’s debt rating at ‘BB+’ with a negative outlook for the moment being, just a notch shy of investment grade.