Recession heightens risk of downgrade

South Africa is officially in a recession, Statistics South Africa said on Tuesday, increasing the risk of another credit rating downgrade.

Adding to the risk of another downgrade are above-inflation public sector wage increases, National Health Insurance and the economic stimulus package announced by President Cyril Ramaphosa.

The Money Show’s Bruce Whitfield interviewed Citadel Chief Economist Maarten Ackerman.

Listen to the interview in the audio below (and scroll down for quotes from it).

If you get higher economic growth everything else basically falls into place.

Maarten Ackerman, Citadel

Growth is a major warning light for rating agencies.

Maarten Ackerman, Citadel

We should actually be downgraded. However, we’ve seen very positive changes… that will result in better numbers down the line… We’re moving in the right direction but the results will only be seen months or years from now.

Maarten Ackerman, Citadel

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