Fitch says South Africa’s budget partly reverses fiscal deterioration

PUBLISHED: Fri, 23 Feb 2018 16:05:26 GMT


South Africa’s budget reverses some of last year’s fiscal deterioration but poor finances of state-owned companies remain a major risk to fiscal targets, ratings agency Fitch said on Friday.

Photo: Flickr

In a budget announced on Wednesday, the Treasury said value-added tax would be raised for the first time in 25 years, part of efforts to cut the deficit and stabilise debt.

“This would represent a partial reversal of recent fiscal deterioration,” Fitch said in a statement.

“Nevertheless, fiscal targets are subject to substantial risks, the largest of which stems from state-owned enterprises, notably the electricity company Eskom, whose medium-term finances are under pressure.”

Reporting by Olivia Kumwenda-Mtambo; Editing by James Macharia

Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent. Sign up here.