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What SA can do to avoid junk status

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Cape Town - Without sufficient momentum on the structural reform agenda to benefit longer-term growth, SA faces the prospect of a downgrade to junk status by at least one of the main rating agencies by year-end, economists at Momentum warned on Tuesday.

Economist Sanisha Packirisamy and head of asset allocation Herman van Papendorp believe that in order to avoid a downgrade to junk by Standard and Poor's (S&P), labour market reforms, black economic empowerment and mining policies must be addressed to promote structural growth in the economy "so that SA can earn a spot among its investment-grade rated peers".
 
These reforms should include the prevention of prolonged and violent strikes and the implementation of a secret strike ballot to prevent worker intimidation, according to Packirisamy and Van Papendorp.

S&P currently has SA’s foreign debt rating on the lowest investment rung and has placed SA on a negative outlook.

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