February 22, 2018 / 1:20 PM / 3 months ago

South Africa budget a good step, says ratings agency S&P

LONDON, Feb 22 (Reuters) - South Africa’s budget measures to raise value added tax (VAT) rate and cut spending was a welcome step, rating agency S&P Global said on Thursday.

“It is good to see that the debt trajectory is getting back on track,” Ravi Bhatia a director in S&P’s sovereign analyst group told Reuters. “The decision to implement to increase VAT is good from a revenue standpoint good.”

“The question is around the implementation of consolidation and whether they can pull it off,” he added, also saying that the plans to cut spending were still focused on future years such as 2020 and 2021.

S&P currently rates South Africa’s foreign currency debt at BB with a stable outlook and its local currency debt at BB+ with a stable outlook. (Reporting by Marc Jones; editing by Karin Strohecker)

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