JOHANNESBURG (Reuters) - South Africa disagrees with S&P's assessment of the political risk in the country, and political debate should not be confused with instability, the Treasury said on Wednesday.

The ratings agency S&P downgraded the country's outlook to negative from stable, saying this reflected the potential for a ratings downgrade if economic and social problems fed into the political debate ahead of 2014 elections.

"Political debate and a vigorous exchange of ideas on policy options are part and parcel of the fibre of a democratic dispensation. This cannot be construed as political instability," the Treasury said in a statement.