Fitch says South Africa's budget partly reverses fiscal deterioration

Fitch says South Africa's budget partly reverses fiscal deterioration
The Fitch Ratings logo is seen at their offices at Canary Wharf financial district in London
JOHANNESBURG (Reuters) - 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.

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)

2018-02-23 13:17:17

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