Fitch’s latest comment on South Africa’s GDP growth highlights the nation’s challenging path to debt sustainability. The ratings agency said it considered National Treasury’s debt/GDP projections as optimistic, with GDP forecasts still too high. The ratings agency, however, indicated it would not change South Africa’s BB- rating, which aligns with the government’s latest fiscal strategy, but noted that sustained fiscal consolidation and GDP growth are needed to improve the rating. This is ultimately what SA needs to aim for, although it must first get itself off the FATF’s grey list. On that front, it appears that the authorities are making some progress and that they might achieve that goal by the middle of next year.
Now, it is over to the US, where election day has finally arrived, shifting attention from electioneering to the actual results. The race is incredibly tight, and the outcome will hinge on the Electoral College to determine the next president. Each candidate brings distinct advantages and drawbacks; one would continue established policies, while the other, serving his final term, could usher in significant changes. With the wait nearly over, this major risk event will soon be behind us, allowing investors to refocus on economic and fundamental factors.