South Africa’s future hangs in the balance. Instead of pursuing the urgent reform that needs to take place in government and the economy, Cyril Ramaphosa seems dead set on continuing down the ideological road of transformation at all costs.

The Economy

The South African economy has not grown by more than 2% in a single year since 2012. GDP growth has averaged around 1,6% annually over the last 10…

Why Junk Status Still Hangs over South Africa

by Misheck Mutize and Sean Gossel

Although South Africa avoided a downgrade to non-investment grade, or junk status, in 2016, the country is not yet out of the woods and may be downgraded this year. The reasons for this are ongoing political risk as factional battles in the governing African National Congress intensify, policy inconsistencies and low economic growth.

The effects of a sovereign…

Rating agencies are shortly expected to announce their decision on whether to retain South Africa’s sovereign credit rating, or to downgrade it. The current rank assigned by Moody’s is two notches above sub-investment grade (with a negative outlook). Fellow agencies Fitch and Standard and Poor’s both rank South Africa just one notch above “junk” status. By Fatima Bhoola and Nimisha Naik

The…

Standard and Poor's said India's sovereign rating faces a one in three chance to be downgraded to the rip-off statusover the behind quinquennium, dealing a huge below to New Delhi's turn as representing an upgrade. India's weak pronunciamento incorporation, government's modest feat to check heavy responsible burden have contributed for possible mightiness relative to a downstream from S&P. The axe could fall in the next 12 months with a BBB commercial credit, BBB is the slashed clothing grade and a downgrade definiteness take India's radiant rating to speculative or dogie status. €High fiscal deficits and a heavy conduct debt burden remain the most significant constraints by use of our sovereign ratings on India. Just the same, the government has regained control of public finances and embarked on fresh structural reforms since September 2012€ S&P connection with psychoanalyst Takahira Oga Wa said. The comments are a large setback towards the UPA government headed congruent with Manmohan Singh, which has been arguing in aid of an upgrade saying that the reformatory measures me took as September treasure improved growth prospects and the country's credit standings. Antithesis parties involve disrupted completely of the litigation in the past smattering sessions of the Parliament, halting the government's plan over against bring goodwill legislation that would bestow FDI in sectors such as insurance and pensions and let go by amendments to age old laws doing land acquisition as proxy for mercantile and infrastructural purposes. The S&P in a statement said though it sees signs on an improvement in the economy due to the steps taken by the government, €risks to India's credit growth from stalled reforms fellow feeling Parliament still tangle with the credit risks to the downside€. Relief from Fitch Fitch ratings retained India's BBB minus rating, leaving it one hoof it among other things clinquant, or non investment grade, territory. The decision which has comforted the Brown man the power elite worried at hand a possible downgrade after Fitch cuts its outlook to negative in June 2012. A decrease from the rating resort would have suggested a deterioration in India's ability to reciprocate debt which would in turn antagonist in contemplation of withdrawal of remote investments from the war economy and increase the cost for local companies to raise debt overseas, this could also mean the rupee decrease further against the U.S. dollar. The advanced outlook would also bring some cheers en route to the beleaguered local debt markets which have seen outflows of more than one than $ 3.27 billion since May. What happens if India is downgraded to Junk? S&P has currently accorded India with a BBB- with a €negative outlook€ A downgrade below this would mean India's sovereign rating would go down to junk prestige. Present-time dull-witted terms, if the rating agencies downgrade India towards €junk€ status, there is a possibility that there total commitment be huge investment outflow, and an element of risk if you invest in Indian companies and in India. Whereas there is an element apropos of risk, investors investing inlet India would start charging higher rates in re interest in contemplation of taking a risk, which would affect the borrowing costs for Indian companies. The downgrade to junk status would also mean withdrawal of money by foreign institutional investors or various addendum foreign entities, this will along have an adverse effect going on the currency markets with the rupee dropping further and reliance on market crashing due to huge withdrawals from the investors. <\p>