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By Tinashe Zvakasikwa.

CAPETOWN, South Africa. (News Of The South) – – Speaking at the National Treasury’s budget vote in Parliament, Cape Town earlier on Wednesday the Finance Minister Pravin Gordhan expressed optimism on the economy’s growth rate and said that the economy will see a positive upgrade despite the impending drought and a growing concern over the investment effects of cutting ties with Oakbay.

“The lingering effects of the drought may still be with us but as the energy constraint eases and household debt moderates, we will see a steady recovery in confidence and investment.”

The issue of investor confidence was brought up following cabinet probing concerning the Ministry of finance’s involvement in the decisive meeting with South African banks on the way forward with regards to their working relations with the Guptas’ Oakbay Investments.

He also added that, “We are cautiously optimistic that our recovery will continue, our growth will be slightly higher. There is a strong chance that the economy may increase faster than the 2, 7% the government had expected, however oil prices escalations could pose a serious threat to economic growth.”

From today, the cost of a litre of 93 unleaded petrol inland is expected to be sitting at R12.44/l and R12.06/l at the coast while 95 unleaded petrol will be at R12.74/l and R12.26/l at the reef and coast respectively.

The South African Reserve Bank (SARB) also share the same view about the increasing growth of the economy, however, this light is overshadowed by the fear that oil prices could be a serious threat which may lead to inflation. The Reserve Bank warns that South Africa faces a medium to high probability of a downgrade to non-investment status.

The group’s sentiments, contained in a Financial Stability Review published on Tuesday, has seen the rand track back towards R15.00 against the dollar. In morning trade on Tuesday, the local unit weakened 1.44% to R14.84 against the dollar.

Standard & Poor’s and Fitch rate South Africa a notch above sub-investment grade, while Moody’s has it two notches above junk.

Bloomberg noted that South Africa risks losing its investment-grade status with S&P Global Ratings due to review its BBB- assessment, which is one level above junk, in June.

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