CAPE TOWN South African (Xinhua)
-- The South African
government’s newly announced Inclusive Growth Action
Plan is unlikely to significantly boost economic growth
prospects, international rating agency Fitch said on
Most of the
measures have been previously announced, the agency
African Minister of Finance Malusi Gigaba presented the
plan on July 13 as a reaction to the recession in the
fourth quarter of 2016 and the first quarter of 2017.
initiatives focus on governance of state-owned
enterprises (SOEs), containing pressure on public
finances, and boosting black economic empowerment and
measures would only have an indirect impact on growth
prospects, Fitch said in a statement.
measures were already announced, for example in the
nine-point plan in President (Jacob) Zuma’s February
2015 State of the Nation address, or are part of regular
processes, such as the commitment to a sustainable
public sector wage deal,” the agency said.
changes to the governance standards for SOEs would be
important, but the main obstacle to improving SOE
performance remains the implementation of governance
standards in day-to-day operations, said Fitch.
the new package adds firm deadlines for many of the
measures, Fitch said.
these deadlines are tight and not all may be met, but
they add urgency to policy-making, Fitch added.
reduced its 2017 real GDP growth forecast for South
Africa to 0.6 percent from 1.2 percent in its June
Global Economic Outlook.
also lowered its 2018 forecast for the country to 1.6
percent from 2.1 percent.
forecasts reflect weak first quarter results this year
and that political uncertainty will continue to weigh on
companies’ willingness to invest,” Fitch said.
GDP growth than ratings peers, partly due to a
deteriorating investment climate, is a key weakness for
South Africa’s ‘BB+’/Stable sovereign rating, which
Fitch affirmed in June, the statement said.