WATCH: Moody’s gives SA last chance to dodge downgrade
This was the message that credit ratings agency Moody’s Investors Service delivered to South Africa on Friday following the tabling of the Medium-Term Budget Policy Statement (MTBPS) on Wednesday.
The country projects that its debt-to-GDP ratio will escalate to 60.8percent this financial year, and will most likely exceed 70percent of GDP by 2022/23.
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Economists have warned that this signals trouble for the economy in about a year’s time, as reforms are slow to boost confidence, as the growth forecast has been slashed from 1.5percent to 0.5percent in 2019.
Moody’s on Friday changed the outlook on South Africa’s ratings to negative from stable and affirmed the Baa3 long-term foreign-currency and local-currency issuer ratings.
The rand took the news in its stride, holding steady at levels of about R15.02/$. The bond and currency markets had largely priced in the risk of a negative outlook already.
Source: iol.co.za
