It could take at least 10 years for SA to get back to investment grade - chief economist

Kevin Lings, Chief Economist at Stanlib, a Johannesburg-based asset manager, spoke to Jackie Cameron of BizNews about the budget presented in Parliament this week. He notes that the the South African economy is expected to have contracted by around 7.2% in 2020, its worst annual performance since at least 1960. Closing the gap between South Africa’s current trend growth rate, and a modest target of 3% on a sustained basis is going to require a significantly larger implementation effort than is currently evident. All South Africa’s international credit ratings are now below investment grade. The key driver behind the rating downgrades was the further expected weakening in South Africa's fiscal strength over the medium term. While South Africa is not the only country to have been severely affected by the crisis, its capacity to mitigate the shock over the medium term is regarded as lower than that of many sovereigns given significant fiscal, economic and social constraints and rising borrowing costs, he says.
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