Moody’s Investors Service (Moody’s) has downgraded South Africa’s investment grade credit ratings, the National Treasury said yesterday. Spokesperson Phumza Macanda said the credit rating was downgraded to “Baa2 / P-2” from “Baa1 / P-2”, which brings South Africa on par with Spain and Brazil. “The credit outlook has been revised to stable from negative,” she said in a statement. She said the government noted Moody’s decision and recognised that economic growth had slowed down and there was a need to implement growth-inducing initiatives.
“The medium-term strategic framework prioritises initiatives that will boost investment, including major projects in rail, energy and ports. “Furthermore, focus in the medium term will be on accelerating the structural changes that are already under way and whose impact will support economic growth,” she said. “The ratings agency’s decision to assign a stable outlook to the current ratings affirms government’s commitment to fiscal discipline, which was reinforced by the recently published medium-term budget policy statement.”
Macanda said government was committed to narrowing the budget deficit, stabilising debt and rebuilding the fiscal space that enabled South Africa to escape the worst effects of the global economic crisis. “Government will continue to make the tough decisions that are necessary to address our challenges so we can build on the gains we have made over the past 20 years to improve the lives of our people.”