Since the announcement of the Cabinet reshuffle by President Jacob Zuma, two rating agencies have downgraded South Africa’s foreign currency rating to sub-investment grade status (junk status).
But how will the ratings downgrade impact the lives of ordinary South Africans?
Christie Viljoen, economist at KPMG South Africa, says the immediate impact of the downgrade will be seen in fuel prices in the coming month.
In a few months from now, Viljoen says SA's weaker Rand will push up the price of imported goods.
South Africa imports a wide variety of goods from vehicles, food and clothing, so a price increase will been seen there as well.— Christie Viljoen, Economist at KPMG South Africa
The government needs to pay more money whenever it goes to borrow money abroad.— Christie Viljoen, Economist at KPMG South Africa
South Africans will see a little less of their tax money being spent on local infrastructure... and tax will go up again.— Christie Viljoen, Economist at KPMG South Africa
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This article first appeared on CapeTalk : Brace yourself for higher fuel prices due to junk status