South Africa's GDP data revamp may brighten credit ratings outlook

accreditation
0:00
play article
Subscribers can listen to this article
Photo: iStock
Photo: iStock

An improvement in South Africa’s key fiscal metrics prompted by a change in the way statistics authorities calculate gross domestic product could brighten the outlook for the junk-rated nation’s debt assessments. 

South Africa's economy is 11% bigger than previously estimated, Statistics South Africa’s updated estimates released Wednesday show.

The revision augurs well for the country’s debt-to-GDP ratio and has “positive implications for South Africa’s sovereign ratings and outlook,” said Nema Ramkhelawan-Bhana, the head of research at Rand Merchant Bank.

South Africa’s debt assessments are at the lowest levels since it first obtained credit ratings 27 years ago. Companies, including Fitch Ratings, have flagged the continued rise in government debt as a key risk to the country’s ratings outlook.      

The data revision means debt as a proportion of GDP will now remain below 80% through 2023-24, said Annabel Bishop, chief economist at Investec Bank.

The government projected in February that the ratio would breach the 80% mark in the year through March 2021, and reach 87.3% of GDP in the 2024 fiscal year. 

“This will be pleasing to the rating agencies, but still shows rising debt as opposed to stabilisation, and also assumes no additional borrowing,” she said. 

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
17.21
-0.1%
Rand - Pound
21.32
+0.1%
Rand - Euro
18.70
+0.1%
Rand - Aus dollar
12.24
-0.0%
Rand - Yen
0.13
-0.4%
Platinum
1,016.00
+1.2%
Palladium
1,617.34
-3.0%
Gold
1,929.54
+0.0%
Silver
23.58
-1.4%
Brent Crude
87.47
+1.5%
Top 40
74,766
+0.4%
All Share
80,791
+0.4%
Resource 10
77,871
-0.4%
Industrial 25
103,872
+0.7%
Financial 15
16,281
+0.6%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders