Moody’s hints at credit rating upgrade for SA, but with conditions
Rising government debt and contingent liabilities risks from SOEs remain a concern
SA has received another reprieve from Moody’s Investors Service. The credit ratings agency says that SA’s credit rating may be upgraded, depending on certain economic reforms. This is according to a credit opinion from the agency, which importantly does not constitute any rating decision. “Successful implementation of structural reforms to raise potential growth as well as stabilize and eventually reduce the government's debt burden, including through reforms to SOEs that reduce contingent liabilities, would exert upward pressure on SA's ratings,” reads the report compiled by Moody’s vice-president Lucie Villa. The government is currently rated investment grade (Baa3) with a stable outlook, with a credit profile supported by a diversified economy, a sound macro-economic policy framework and relatively deep financial markets, Villa said. However, she warned that rising government debt and contingent liabilities risks from state-owned enterprises (SOEs), “which limit the capacity of t...
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