National Treasury says Moody’s latest outlook for South Africa affords the country a narrow window to demonstrate a faster and concrete implementation of reforms that are already underway, aimed at lifting growth and returning public finances to a more sustainable path.
It said in a statement that government had noted the decision by Moody’s to affirm South Africa’s long-term foreign and local currency debt ratings at ‘Baa3’ and also revise the outlook from stable to negative.
South Africa’s credit rating remained investment-grade - one notch above junk status.
Finance Minister Tito Mboweni has urged South Africans to work together to avoid a downgrade to junk.
According to Moody’s, the outlook revision reflected the material risk that government would not succeed in arresting the deterioration of its finances through a revival in economic growth and fiscal consolidation measures; and the problems government faced were evident in the continued deterioration of the country’s economic growth and public debt burden trends.
Government's debt-to-GDP ratio is currently 61% and will grow to above 71% of GDP by 2022.
Last week, Mboweni told MP's that the debt-to-GDP ratio is "galloping" towards 80%.
- African News Agency
