CAPE TOWN, April 2 – Moody’s on Tuesday issued a credit opinion maintaining South Africa’s sovereign credit rating at investment grade.
It kept the country’s rating at Baa3, the lowest rung of investment grade, with a stable outlook. The note was published a few days after the last of the three biggest ratings agencies to keep the country at investment grade, delayed a much-expected review of South Africa’s credit worthiness.
“While economic growth will remain slow and fiscal strength will continue eroding, we expect South Africa’s credit profile to remain in line with those of Baa3-rated sovereigns,” Moody’s said.
‘We expect that the government’s policies and the institutions will remain focused on addressing this trend but any reversal will be gradual at best given that social, economic and fiscal policy objectives will remain difficult to reconcile.”
Moody’s named deep-rooted political divisions, growth-limiting structural economic bottlenecks and the weaknesses of state-owned enterprises as the credit challenges South Africa faces.
The reprieve comes a month before national elections and saw the rand rally. (ANA)