South Africa’s economy will contract by more than initially projected, likely shrinking 6.9 per cent in 2020 compared to an earlier forecast of a 4.5 per cent contraction, ratings agency S&P Global Ratings said on Monday in a report. S&P cut its rating one notch to the third tier of non-investment grade, BB-, in April, with a stable outlook. SEE ALSO: Virus surge sparks South Africa curfew and Spain local lockdownS&P’s growth forecast is however more optimistic than National Treasury’s prediction of a 7.2 per cent contraction this year. Treasury predicts debt to gross domestic product will breach 80 per cent as government borrows more to fund its response to the pandemic. To cushion the economic blow of the pandemic on the economy, President Cyril Ramaphosa announced a 500 billion rand ($28.86 billion) relief package in April, equivalent to 10 per cent of South Africa’s GDP.

Source: Standard Digital July 14, 2020 17:37 UTC