According to British rock band Queen, “too much love will kill you; just as sure as none at all”, while Cable News Network’s (CNN’s) take is that “too much bad news can make you sick”.

If you read a lot of news about the South African economy, you are at risk of falling sick, if what CNN’s Alexandra Pattillo wrote in June 2018 is anything to go by. This country’s economy is in freefall, and the obvious question is: Just how low can it go? If it were a participant in a Limbo dance contest, our economy would be a title contender. (For the uninitiated, the Limbo is a popular dance contest, with the aim to pass forward under a low bar without falling or dislodging the bar.)

It is not so much a question of what has gone wrong with the economy, but what has gone right. If you are an optimist, the two-word response is “very little”, but if you are a pessimist, a one-word response – “nothing” – will suffice.

When things go wrong, it is too easy for government to blame external factors rather than to admit that it is actually responsible for the state of affairs. On the day I wrote this piece, November 20, Fitch Ratings – one of the ‘Big Three’ credit ratings agencies, the other two being Moody’s and Standard & Poor’s – downgraded South Africa’s sovereign credit rating from BB to BB-, with a negative outlook.

In case you are of an age when a B on your report card was considered quite a feat, as far as the ratings agencies are concerned, quite the contrary is true. A BB signifies ‘non- investment grade’ and implies “elevated vulnerability to default risk, more susceptible to adverse shifts in business or economic conditions; still financially flexible”.

Armed with this knowledge, do you want to venture a guess as to the reasons Fitch gave for its decision? Take a moment, pause and look outside your window. As Tanita Tikaram sings, there is “a world outside your window”. What do you see?

Fitch Ratings stated: “The downgrade and negative outlook reflect high and rising government debt, exacerbated by the economic shock triggered by the Covid-19 pandemic. The very low-trend growth and exceptionally high inequality will continue to complicate fiscal consolidation efforts.”

It added: “In October, government launched an Economic Reconstruction and Recovery Plan, focusing on boosting infrastructure investment, increasing energy supply, job creation and reindustrialisation. However, the track record of implementation of earlier reform initiatives has been relatively weak and, even if implemented, the effect of the reforms would be limited and take time to accumulate. The challenging fiscal context will also complicate some of the initiatives and will weigh on growth over the medium term.

“Fiscal risks from the struggling State-owned-enterprise sector and other contingent liabilities have been exacerbated by the pandemic shock. Liabilities of State-owned financial and nonfinancial enterprises and guarantees to independent power producers and for private–public partnerships amounted to 20.5% of gross domestic product (GDP) at end-March this year.”

By now you must be wondering as to what could make it worse. Fitch provides an answer: “The main factors that could, individually or collectively, lead to negative rating action/downgrade include: (i) public finances: a continued rise in government debt/GDP and failure to formulate a clear and credible path towards stabilising the government debt:GDP ratio; (ii) external finances: rising risk of a destabilising large net capital outflow that triggers sharp exchange-rate depreciation, higher inflation and interest rates; and (iii) macroeconomic performance, policies and prospects: a persistent weak trend GDP growth rate that further undermines fiscal consolidation efforts and raises socioeconomic pressures in the face of exceptional inequality.”