Junk credit ratings loom for SA in 2018
The ratings agency sees evidence of systemic corruption and warns of further downgrades
SA faces the prospect of junk credit ratings from all three ratings agencies in 2018 after a bearish Moody’s downgraded SA to just one notch above junk status on Friday, but warned of further downgrades.
Moody’s, which had previously given SA credit for strong institutions, cited a weakening of institutional strength as a key driver for the decision to downgrade, along with SA’s reduced growth prospects and rising public debt.
It warned that with political tensions rising in the run-up to the ANC’s electoral conference in December and continuing in the run-up to the 2019 elections it was unlikely that political consensus could be reached to support investment and reforms quickly enough to reverse the negative effect on growth and on the government’s balance sheet.
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