EDITORIAL: Moody’s may not be as accommodating this time
The credibility of the Treasury team is what still stands between SA and a credit ratings downgrade to full junk status
The one thing that still stands between SA and a credit rating downgrade to full junk status is the credibility of the Treasury team. Whether that would be enough to sway Moody’s — the only one of three credit ratings agencies that still has SA on investment grade rating — remains to be seen. Moody’s has always been more accommodating of SA, on numerous occasions seemingly going out of its way to give us a break. That, however, may be about to change. In a rather pointed statement on Thursday, the agency made clear its concerns on the budget presented by finance minister Tito Mboweni the day before. Moody’s pointed at many areas of concern about the budget. In particular Moody’s is concerned about the slow economic growth, the R69bn bailout to Eskom, and the resultant breach of the expenditure ceiling. SA will also record a fiscal deficit of 4.5% of GDP, up from 3.6% in the 2018/2019 budget. The “persistent financial stress at state-owned enterprises” is also of great concern for th...
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.