Johannesburg - In June the rating’s agency downgraded South Africa’s
rating and assigned a negative outlook.
Mamello Matikinca, FNB Senior Economist said, “Moody’s
currently has the country’s local and foreign currency at investment grade Baa3
(negative outlook) and we don’t expect any downgrade from today’s release given
how recent the previous downgrade was, and just how little has changed since
then.”
“We do, however, expect that they will have to reduce their
growth expectations for the country which was pegged at below 1% and 1.5% for
this year and 2018 respectively.”
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Matikinca said the agency is also likely to highlight the
risks posed by a weakened institutional framework, persistently poor growth and
risks to the fiscal outlook.
“Our expectation is for the agency to lower South Africa’s
credit rating below investment grade in 2018, after the October MTBPS, the
December ANC elective conference, and the February budget,” Matikinca said.