JOHANNESBURG (Reuters) – Ratings agency Fitch on Friday affirmed South Africa’s credit rating at ‘BB+’, in sub-investment grade, but downgraded the outlook from stable to negative, citing a widening budget deficit and spending on supporting struggling state firms.

Fitch said it believed significant progress in restructuring the state power firm Eskom would be challenging, and that downward revisions to economic growth forecasts in 2019 raised new questions about South Africa’s growth potential.

Reporting by Alexander Winning; Editing by Kevin Liffey