Downgrade will mean less investment but ‘not dramatically so’
It is not as if SA is suddenly going to go into a recession, economist Dawie Roodt says, despite sovereign credit rating downgrades
When presidents fire finance ministers‚ headlines are dominated by concern about foreign investment‚ capital flow‚ government bonds‚ currency depreciation and ratings downgrades — but it all leads to the same thing: people worry about their homes‚ jobs and income. SA’s sovereign credit rating has been downgraded to "junk status" by two ratings agencies — S&P Global Ratings and Fitch. The third‚ Moody’s‚ has placed SA under review for a possible downgrade. So what does this mean for employment? According to economist Dawie Roodt‚ not much. "The reason why is the ratings agencies simply confirmed the conditions. The downgrades don’t change things‚ they are simply saying things are bad and you need to get a downgrade‚" he said. Roodt said the downgrades affirmed the bad news that local and international investors were certainly already thinking about. "Still‚ having said that‚ of course what we have seen is the rand take a bit of a knock and the bond market is a little bit weaker. So c...
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