Drought puts SA more at risk of recession
RATING agency Moody’s on Tuesday issued yet another warning about SA’s low economic growth — the second in two weeks — saying the severe drought has pushed the country to the brink of recession.Modest economic growth has many implications, including retrenchments, low tax revenues and less fixed investment spending by the private sector. It is also one of the reasons rating agencies have downgraded SA in the past."The worst drought on record in SA … is aggravating the economic slowdown, threatening near-zero growth, if not recession in 2016," senior vice-president and lead analyst for SA, Moody’s Kristin Lindow said.This follows a statement on February 4 that lower economic growth was "credit negative" for SA because it would hamper efforts to raise tax revenues and broaden the tax base.Until recently, Moody’s was the most upbeat on SA compared to Fitch and Standard & Poor’s, the two other major global agencies.The spillovers from the drought, such as higher food prices and imports,...
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