SA likely to go deeper into junk status as unrest, public wage bill add to its woes

South Africa is facing another beating from credit-rating agencies and will likely move further down the junk shaft unless it starts taking policy decisions that will convince the agencies otherwise, says Absa's macroeconomic research team.

The past few weeks dealt SA and its economy several blows. The third wave of Covid-19 infections sent the country back to stricter lockdown restrictions, putting harsh brakes on the activity of many sectors.

Then the unrest in KwaZulu Natal and Gauteng happened, and different estimates put the losses at between R35 billion and R50 billion of third-quarter GDP. Then the public wage deal, which will cost R18 billion more than what National Treasury budgeted in February, added more leaks to SA's national purse.