Moody’s keeps its negative outlook on SA’s banking system
Moody’s says ‘volatile and unpredictable’ politics in SA will lead to reduced business and consumer confidence, and sluggish economic growth
Ratings agency Moody’s announced on Monday that it would be retaining its negative outlook on the South African banking system. Moody’s said it expected the sector to remain under pressure for the next 12-18 months, due mainly to "weak operating conditions". It said as a result of the "volatile and unpredictable" political climate in SA, reduced business and consumer confidence would lead to sluggish economic growth. The ratings agency now forecasts SA’s economy to grow just 0.5% in 2017 and 1.8% in 2018. It pointed out this was well below the government’s National Development Plan’s growth target of 5.4%. Finance Minister Malusi Gigaba said in a speech earlier on Monday that it was likely the Treasury’s current forecast of 1.3% growth this year was optimistic, and may well be revised lower when he delivered his medium-term budget policy statement in late October. SA’s unemployment rate remained unchanged at 27.7% in the June quarter from the March quarter, dashing hopes of a slight...
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