SA policymakers are gripped by paralysis while they wait to see whether we will successfully avert a credit rating downgrade from Moody’s Investors Service, the last ratings agency to keep the country on investment grade, despite having recently revised its outlook to negative.

It is a truism that a credit downgrade would have material negative implications for the domestic economy. Our debt servicing costs have already been growing at an average pace of 13% per annum. The third-quarter GDP numbers, coming in at a contraction of 0.6%, will anchor the ratings agencies’ views that SA is struggling to use the tools available to it to galvanise growth sustainably.

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