South Africa may lose Moody’s stable outlook. But it’s a close call
JOHANNESBURG – South Africa’s tenuous hold on the stable outlook on its sole investment-grade credit rating may slip with Finance Minister Tito Mboweni expected this week to show a marked deterioration in the state of the nation’s finances.
Of the 17 economists in a Bloomberg survey, nine forecast that Moody’s Investors Service will change its outlook on the nation’s credit rating to negative before the end of the year. That’s as billions of dollars in bailouts for the cash-strapped Eskom Holdings SOC Ltd. will probably push the budget deficit to a decade high and the economy is struggling to gain traction after last year’s recession.
Mboweni will present the medium-term budget policy statement, that outlines plans for the next three years, in Cape Town on Oct. 30, two days before Moody’s is due to reassess South Africa’s rating. The company may end up only issuing a research report without a ratings action, or nothing at all. It didn’t give assessments on the last two scheduled dates.
Source: iol.co.za
