Carol Paton Writer at Large
Picture: REUTERS
Picture: REUTERS

Moody’s Investors Service said on Tuesday it maintained it's forecast for SA’s 2019 growth at 0.7%, down from the 1% it forecast in June.

However, associate MD Antonello Aquino said that the ratings agency still expected a slight uptick in 2020 to 1.5%.

The forecast is in line with the SA Reserve Bank, which also revised down its forecasts in July to 0.6% for 2019 and 1.6% in 2020.

The ratings agency changed its forecast on August 22. 

Moody’s is due to make ratings outlook change for SA on November 1. The decision is crucial, as Moody’s is the only agency that rates SA government debt as investment grade at Baa3.

Should Moody’s make a cut, SA will slip into junk status.

Senior credit officer Lucie Villa said that the agency had noted progress made by the government in restoring the credibility of institutions, but that there had been less progress in terms of the economy and fiscal policy.

Two weeks ago, the Treasury published a discussion paper on the economy suggesting a range of structural reforms to uplift growth.

“We agree the National Treasury paper would be a positive step but the question is about whether implementation would happen,” Villa said.

Update: September 10 2019
This story has been updated to reflect that Moody's cut its growth forecast in August. 

patonc@businesslive.co.za