In its latest review released last night, S&P stated that the rating is still constrained by relatively low GDP growth rates, as well as sizable fiscal deficits and high government debt.

It noted that despite the expected tabling of the budget next week and the removal of VAT, fiscal consolidation is planned to continue over the next three years.

The formation of the government of national unity had initially renewed hopes of a credit upgrade for South Africa.

Late last year, S&P revised South Africa’s outlook to positive from stable, citing plans for accelerated economic reforms by the new government of national unity and growing private investment.

The National Treasury noted the latest decision by S&P. In a statement, it said it will continue to focus its fiscal strategy on striking a balance between stabilising public finances and reducing risks in the fiscal framework.

It will also ensure economic growth and support for low-income and vulnerable households.

--SABC--