Goldman more upbeat on South Africa than its Finance Minister
Goldman Sachs believes South Africa is unlikely to suffer the large revenue shortfall projected by its finance minister and that the nation’s path for fiscal consolidation remains credible.
Finance Minister Enoch Godongwana painted a bleaker-than-expected picture when he delivered a medium-term budget update last week with a slightly wider deficit. Despite this caution, South Africa remains on track to stabilise debt and bring if below 70% of gross domestic product by the end of the decade, Goldman economist Andrew Matheny said.
“We would be surprised if you get the magnitude of revenue shortfall that they’re pointing to,” Matheny said. “We are more optimistic. If anything, we think they’re probably being overly conservative here.”
Economists had expected a revenue shortfall of around R12-billion. Instead, Godongwana announced a R22-billion gap, widening the deficit to 5% of GDP from 4.5% projected in February.
Goldman had seen scope for a possible improvement on South Africa’s sub-investment-grade credit ratings within six months. While it may not happen that soon, a positive outlook remains on the cards, Matheny said.
Fitch Ratings and Moody’s Ratings may review South Africa’s assessment following the release of the budget update, while S&P Global Ratings’ assessment is due from November 15. All three companies have a sub-investment grade rating on South Africa with a stable outlook.
“You don’t narrow that deficit as quickly but this is still a stabilising debt path versus market consensus and also ratings agency expectations for a more adverse path,” he said, adding that Fitch and S&P, which both rate South Africa BB-minus, are “a little bit behind the curve in terms of calling a bit of a turn in the credit cycle.”
Comments
Research Reports
Projects
Latest News
Showroom
ENVASS is a customer and solutions-driven environmental consultancy with established divisions, serviced by highly qualified and experienced...
VISIT SHOWROOM
Education: Consulting with member companies to obtain the optimal benefits from their B-BBEE spending, skills resources as well as B-BBEE points
VISIT SHOWROOM
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation
