Briefing note: South Africa’s credit downgrade – A commodity story

According to the agencies’ statements, the move was primarily driven by the political uncertainty following the Cabinet reshuffle and the perception that the fiscal consolidation stance (notably a rise in contingent liabilities of state-owned enterprises) will, as a result, be undermined by the pursuit of the nuclear power plant programme and efforts to spur radical economic transformation. [...] Metals price index: IMF data THE REAL ECONOMY BULLETIN Numerical rating[Grab your reader’s attention with a great quote from the document or use this space to Metals price index 2017 Q1 2016 Q1 2015 Q1 2014 Q1 2013 Q1 2012 Q1 2011 Q1 2010 Q1 2009 Q1 2008 Q1 2007 Q1 2006 Q1 2005 Q1 2004 Q1 2003 Q1 2002 Q1 2001 Q1 2000 Q1 1999 Q1 1998 Q1 1997 Q1 1996 Q1 1995 Q1 1994 Q1 South Africa’s ratings should. [...] Undoubtedly, the downgrade will have some noticeable impact on the country, negatively affecting the sentiment on the domestic economy. [...] The acceleration of capital outflows (already triggered by the fall in commodity prices) will ultimately increase the cost of capital, reducing the ability of both the public and private sector to invest. [...] However, in the long run, the impacts on the real economy are expected to be fairly muted and the current credit rating is unlikely to markedly affect South Africa’s performance, compared to global demand and commodity prices.