Fitch sees South African economy contracting 5.5% this year
Ratings agency Fitch said on Friday it expected South Africa's economy to shrink 5.5% this year, as the coronavirus lockdown batters an economy already in recession.
Fitch downgraded South Africa's credit rating further into "junk" territory in April, citing the lack of a clear path towards government debt stabilisation and the expected impact of the Covid-19 shock on public finances and growth.
In an outlook on sub-Saharan African sovereigns, Fitch said it projected the fiscal deficit would surge to 14.4% of gross domestic product (GDP) in the current fiscal year, with government debt seen rising to 80.9% of GDP.
"Government debt was already on a sustained upward trajectory before the crisis," Fitch said.
"Consolidation measures in the February budget relied heavily on re-negotiating a public sector wage agreement that only expires in April 2021, which has so far been elusive."
The government and public sector trade unions are still locked in a dispute over wage increases that were due to come into force in April. Officials have said they cannot afford the increases agreed as part of a three-year deal in 2018, but unions are trying to force them to pay via the courts.
Africa's most industrialised economy imposed one of the world's strictest lockdowns in late March. It was eased from the beginning of June to let people outside for work, exercise or shopping, and allowing mines and factories to run at full capacity subject to health and safety controls.
Article Enquiry
Email Article
Save Article
Feedback
To advertise email advertising@creamermedia.co.za or click here
Research Reports
Projects
Latest Multimedia
Latest News
Showroom
The Steel Tube Export Association of South Africa was established to develop sustainable, internationally competitive carbon steel tube and pipe...
VISIT SHOWROOM
Rentech provides renewable energy products and services to the local and selected African markets. Supplying inverters, lithium and lead-acid...
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
