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WATCH: Why should we care about junk status?

03 June, 05:41 PM

Ratings agency Standard and Poor's was due to declare South Africa's economic rating on Friday afternoon.

The key question: will or wont the agency declare South Africa's economy as being of junk status?

Several economists who spoke to our colleagues at Fin24 suggested a downgrade was - for now - unlikely.

Nonetheless, a junk status rating would contribute to the challenging economic climate in South Africa.

The country is already facing weak economic growth. In the last quarter of last year, the Gross Domestic Product (GDP) only grew by 0.40 percent.

A weak rand, rising fuel costs and national drought have further contributed to the country's fiscal woes.

Where do ratings agencies fit in? And should we even care about junk status? Watch above.

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