Johannesburg – The financial ratings agency Moody’s has left Saturday unchanged its rating of Baa2 with a negative outlook assigned to the South Africa, but has warned of a likely deterioration if it fails to undertake reforms and support growth.
Contrary to expectations, Moody’s has not formally revised its note, but was satisfied to publish an “updated opinion”, which also highlights the risks caused by the political unrest that has swept the country around the governance of president Jacob Zuma.
The rating of Baa2 is two notches above the level of speculation.
The negative outlook reflects the risks related to the implementation of structural reforms designed to restore confidence and encourage investment,” says Moody’s in a press release published in the night from Friday to Saturday.
The concerns expressed by the agency are also attributed to “political infighting that promote uncertainty and hamper structural reforms”.
For years, the economic engine of south africa at idle, a victim in particular of the fall in commodity prices, and the unemployment rate hitting over a quarter of its active population.
president Jacob Zuma is weakened for months by a series of corruption scandals that earned him sharp criticism, including within his party, the african national Congress (ANC).
In 2017, the ANC must elect a new leader, who will automatically be the presidential candidate of the ANC in the general elections of 2019.
In its rating, Moody’s warns South Africa that his note “would very likely be lowered in the absence of structural reforms to foster high and sustainable growth in the medium term”.
Before Moody’s, Fitch had also on Friday maintained its rating of BBB – to the South Africa, but had lowered its outlook from “stable” to “negative”.
Standard & Poor’s shall complete this assessment by publishing its updated note on Friday.
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