Local government bonds were marginally weaker at midday on Friday, but poised for further gains amid views that Wednesday’s budget had averted a downgrade rating from Moody’s, due to be announced on March 23.The projected fiscal deficit falling to 3.5% GDP by 2020-21, coupled with the gross debt projections stabilising at 56% of GDP and then falling to 55% by 2025-26 from previous projections of 63%, are likely to have made SA’s government finances more palatable to the ratings agencies, Investec chief economist Annabel Bishop said."It could be enough to avoid a Moody’s downgrade," she said.Moody’s has said that SA has made a number of credit positive strides since December 2017. The budget, on its own, does not necessarily argue for a credit rating downgrade, but certain components of the budget are credit positive, especially the marked decline in projected borrowings.The benchmark R186 broke through 8% after the budget, before weakening marginally. It may be set to test 8% again,...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.