South Africa

S&P Cuts South Africa's Debt Rating

Instability and tension in the mining sector blamed

|

Standard & Poor's Ratings Service cut its rating on South African government debt Thursday by one notch because of increasing uncertainty tied to mining strikes and rising social tension.

South Africa's sovereign-debt rating was cut to triple-B from triple-B-plus. That puts the country's rating just two notches above being considered junk. S&P maintained a negative outlook on the debt, which is a long-term view on the potential direction of the rating.

In cutting South Africa's rating, S&P said ongoing strikes in the mining sector will cause uncertainty for future policy framework in the African National Congress ahead of 2014 elections. Underlying social tensions tied to the strikes could also increase spending pressures and reduce fiscal flexibility for the government, S&P said in a report.