On Friday, the 22nd of November 2019, the US-based credit rating agency, Standard & Poor’s, often considered as one of the top three credit rating agencies alongside Fitch’s and Moody’s, had slashed South Africa’s credit rating outlook to “negative” from an earlier “stable”, adding that the second-largest African economy in terms of size had been dealing with a denting debt burdens alongside a weaker pace in economic expansion, as a global-scale slowdown appeared to be started off to cast its darkening shadow over Africa after pushing much of the European, Asia and America’s manufacturing sector in to a technical recession.
In point of fact, latest lowering of credit rating of South Africa came forth at the same day, while United Kingdom’s PMI data had indicated its worst economic downturn since 2016, while both manufacturing and service sector activity in UK had been in a technical recession.
Meanwhile, South Africa, a nation with an unemployment rate over 30 per cent, had yet to post a technical recession, but its economic growth was slowing down and the recent downgrade of its credit rating had raised possibility of a downgrading of government bonds of Africa’s most-developed economy, fortunes of which were mostly meaded of a strong industrialization and mining activity.
Besides, expressing worries over the country’s worsening debt-metrics alongside a slowing GDP (Gross Domestic Product), Standard & Poor said on Friday (November 22nd), “The negative outlook indicates that South Africa’s debt metrics are rapidly worsening as a result of the country’s low GDP growth and high fiscal deficits. ”