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When the credit rating agencies do their reviews in November, it is very likely that South Africa will face another downgrade to sub-investment grade across the board, according to Annabel. 


Rating agencies will focus on three areas in Minister Gigaba's mini-budget, namely: budget deficit, medium-term expenditure and government debt. In this podcast, Annabel explains what the figures for each factor mean:


  • Budget deficit as a percentage of GDP has risen quite significantly. It was projected to be close to 3% for the current fiscal, and now it’s forecast at 4.3%.
  • Medium-term expenditure framework for next three years: the fiscal deficit was previously projected to be around 3%, this has now risen to around 4%.
  • Government debt: Gross loan debt in the current fiscal is 54%, and Gigaba says government sees it rising to close to 60% in 2020/21. Even on a net debt basis, it has risen from 50% to 56% of GDP.


Listen to podcast

Gigaba's mini budget "not focused on cutting the cloth"
Annabel Bishop
Annabel Bishop, Chief Economist

This budget is not a budget of fiscal consolidation, but rather of fiscal widening.

Jump to the topics you're interested in by using the time codes below


01:03: What factors do credit agencies look for when reviewing a country’s credit rating?

02:58: Economic growth projections

03:30: The ailing parastatals

05:05: What are the key decision points out of the minister’s speech?

06:27: How has the minister’s speech affected the markets?

About the author

Annabel Bishop

Annabel Bishop

Chief Economist of Investec Ltd

Annabel holds an MCom Cum Laude (Economics and econometrics) and has worked in the macroeconomic, risk, financial market and econometric fields, among others, for around 25 years. Working in the economic field at Investec, Annabel heads up a team, which focusses on the macroeconomic, financial market and global impact on the domestic environment. She authors a wide range of in-house and external articles published both abroad and in South Africa.

More podcasts from Annabel Bishop

Cyril Ramaphosa

Insights into the South African economy

The opinions and views expressed are for information purposes only and are subject to change without notice. They should not be viewed as independent research, recommendations or investment advice of any nature.