New measures needed to avoid Moody’s downgrade decision
09 March 2016
Moody’s decision to place South Africa’s investment rating on a “review for downgrade” should focus government’s mind on doing what it takes to avoid “junk status” for South Africa.
A ratings downgrade to “junk status” will raise the cost of borrowing, result in capital outflows, lead to further currency weakness, and increase the cost of living for ordinary South Africans.
Moody’s “review for downgrade” decision was prompted by a negative assessment of:
- our prospects for economic growth, which have been revised downwards from 1.7% to 0.9% in 2016/17; and