South Africa’s credit downgrade has rocked the industry to say the least. But the outlook is not all bleak. In terms of the ‘here and now’, top economists are expecting that the property market will largely continue as is.
Recently Fitch has affirmed South Africa’s Long-Term Foreign- and Local-Currency Issuer Default Ratings (IDRs) at ‘BB+’ with a Stable Outlook. The city of Cape Town and the Western Cape province as a whole has managed to maintain a stable political and market-enabling policy environment, avoiding the “deteriorating governance” cited as negative contributor to Fitch’s national rating decision.
“In the Western Cape, we believe in transparent processes and we work hard to root out corruption. The majority of the municipalities in our province are consistently awarded with clean audits from the Auditor-General of South Africa, an indicator of the good management of public money. While we are not immune to national political instability, it is clear that leading international ratings agencies recognise the commitment to good governance of this region,” said Minister of Economic Opportunities Alan Winde.
The opinion from thought leaders was that the South African Reserve Bank would keep interest rates on hold throughout the remainder of 2017, with a rate cut unlikely in the foreseeable future. The outlook has changed more positively since, as we are now in a recession, and there is a hint that the Bank will begin cutting interest rates before the end of the year.
CFC remains positive about the future of South Africa and continues to lead in the scaffolding and formwork industry.