South Africa's rating sinks further into junk territory with Fitch cut

Nov. 20, 2020 4:21 PM ETiShares MSCI South Africa ETF (EZA), FLZAEZA, FLZABy: Liz Kiesche, SA News Editor4 Comments
  • Fitch Ratings downgrades South Africa's long-term foreign-currency issuer default rating to BB- from BB; outlook negative.
  • The cut reflects "high and rising government debt, exacerbated by the economic shock triggered by the COVID-19 pandemic," the ratings company said.
  • "The very low trend growth and exceptionally high inequality will continue to complicate fiscal consolidation efforts."
  • Fitch expects South Africa's GDP to remain below 2019 levels even into 2022; sees GDP contracting by 7.3% in 2020.
  • S&P Global Ratings, meanwhile, affirmed South Africa's long-term foreign and local currency ratings at BB- with a stable outlook.
  • ETFs: EZA, FLZA

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