Ratings agency Standard and Poor’s on Friday lowered South Africa's long-term foreign currency credit rating one notch, from BBB to BBB- minus.
The agency says in a research update the downgrade reflects its expectation of lacklustre gross domestic product growth in South Africa, against a backdrop of relatively high current account deficits, rising general government debt, and the potential volatility and cost of external financing.
According to Standard and Poor’s, BBB means a government has adequate capacity to meet financial commitments, but more subject to adverse economic conditions.
It says BBB-minus, is considered the lowest investment grade by market participants.
The agency says a prolonged strike in the platinum sector, as well as weak domestic and external demand, led GDP to contract in the first quarter of 2014 and is likely to depress second-quarter GDP growth.
