JOHANNESBURG – Ratings firm Moody’s will visit South Africa in the next week to decide whether to downgrade its credit status to just one notch above sub-investment grade, the Treasury said on Wednesday.
“This review visit will primarily serve to either affirm the current ratings or downgrade them,” it said in a statement.
On Tuesday, Moody’s said it was placing South Africa’s long and short term ratings (Baa2 and P-2 ) on review for downgrade, citing the economy’s weak growth prospects and the government’s worsening fiscal position.
Treasury said during its visit Moody’s will “assess the views of various stakeholders in government, civil society, labour and in the private sector on a number of areas”. This includes whether the decline in South Africa’s economic strength will be reversed in the medium term, sufficient progress can be made to stabilise and restore fiscal strength, and whether policy is likely to lead to a reversal in the continuing erosion of the government’s balance sheet.
Treasury said in its meetings with the agency it will highlight its “collaborative actions” to accelerate inclusive growth, measures adopted in the 2016 budget to accelerate fiscal consolidation and give effect to the National Development Plan, steps taken to reinforce stable industrial relations, the accelerated implementation of its R870 billion infrastructure investment programme, progress made in resolving the energy constraint, as well as initiatives to implement the recommendations of the Presidential Review Commission on SOCs.