Distressed SA faces Moody’s downgrade
The ratings agency halves growth forecast for the country and says its economic contraction is a credit negative
The first recession in almost a decade could cost SA its remaining investment-grade rating, with disastrous consequences for the country and consumers who are already under strain from tax increases and near-record petrol prices. Moody’s Investors Service on Thursday halved its 2018 growth forecast for the country and said economic contraction in the first six months of the year was a "credit negative". Moody’s is the last of the big three international ratings agencies to have SA’s long-term foreign-currency debt at investment grade. A Moody’s decision to push the country’s debt into junk would see SA fall out of key gauges, such as Citigroup’s World Government Bond index, which may prompt investors to dump as much as R100bn of SA assets. "The recession has heightened the country’s risk of suffering yet another credit downgrade in the second half of the year," said Citadel chief economist Maarten Ackerman. This week’s GDP numbers showed the economy shrank 0.7% in the second quarter...
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