Fitch cut South Africa's sovereign rating by one level to BBB- with a stable outlook, the country rating is just one notch above the "junk status", as rated by both Fitch and S&P. The growth is weighed on by lower commodity prices and electricity shortage.
This decision to cut the rating was due to weakening GDP growth and ts potential. There was a contraction in the economy in Q2, and managed to escape a recession slightly in Q3, the growth picked up to 0.7% qoq annualized.
This rate is lower than the market consensus expectations of a 1.1% qoq rise, indicating that the obstacles to the economic activity remain large.
"At the same time domestic confidence remains very downbeat. We expect growth of around 1.0% for 2015, and to remain weak in 2016", says Nordea Bank.