Rating agency, Moody's has downgraded South Africa's credit rating outlook from stable to negative, citing the country's bleak growth prospects and mounting public debt.
Moody's said in a statement on Friday evening that its decision to change the outlook reflected the real risk that the government would not stem the deterioration of the country's finances through fiscal consolidation and fresh growth.
It also raised concern about what it termed the government's lack of "political capital".
It listed unemployment of more than 29 percent, low investor confidence and resistance from key stakeholders on reforms as enduring obstacles to an economic upswing.
Moody's acknowledged that government had tabled measures to address joblessness and policy uncertainty, but said it feared that these would not have the desired impact or that the government would not have enough support to drive them through.
Friday's decision is likely to be interpreted as a sign that Moody's next move on the sovereign credit rating will be a downgrade to junk status.
- African News Agency
