Economist believes SA may escape further downgrades
Chief economist at Econometrix Azar Jammine believes South Africa could escape a further credit rating downgrade later this month.
Credit ratings agency Moodys is set to announce its latest outlook for the South African economy on March 23.
Moody’s is seen as the most generous of the big three credit rating agencies and the only one to still rate both foreign- and local-currency South African government bonds as investment grade.
Jammine predicts the country may escape a downgrade due to the solid budget tabled by Finance Minister Malusi Gigaba last month.
At the same time, Jammine warns that government needs to stick with the promises made in the budget, otherwise Moody’s could decide to downgrade the country later on in the year.
Jammine says despite the positive political developments since the start of the year, the issue of land expropriation without compensation could have a negative effect on investor confidence.
“The issue of land expropriation with compensation has thus far not had an impact on the currency but it will have in due course.”
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