Fitch revises S.Africa outlook, sees GDP recovery

Reuters, Monday 17 Jan 2011

Africa's biggest economy's real GDP growth recovered to 2.8 per cent in 2010, at faster rates than initially expected

Ratings agency Fitch revised South Africa's outlook to stable from negative, saying it had emerged from recession with its credit fundamentals roughly in line with, or slightly better, than its peers.

Fitch said in a statement on Monday it expected real GDP growth to have recovered to 2.8 per cent in 2010 after contracting the previous year.

"South Africa's post-global crisis adjustment process has been smoother than originally thought," said Veronica Kalema, director in Fitch's Sovereign Group.

"After falling 1.7 per cent in 2009, Fitch expects real GDP growth to have recovered to 2.8 per cent in 2010. The recovery is slightly faster than originally projected by the government and has aided fiscal consolidation."

The National Treasury revised 2010 growth forecasts upwards to 3.0 per cent last October from the 2.3 per cent seen in February, after Africa's biggest economy suffered its first recession in nearly two decades in 2009.

Fitch said spending by power utility Eskom and logistics group Transnet would continue to provide economic stimulus.

"The ability of local capital markets to finance wider deficits with relative ease emphasises a key rating strength of South Africa," it said, affirming South Africa's long-term foreign currency issuer default ratings (IDR) at 'BBB+', its long-term local IDR at 'A' and short-term foreign currency IDR at 'F2'.

Search Keywords:
Short link: