SA waits for ratings on economy
An economist said if SA is downgraded it will be more expensive for govt to borrow money.
JOHANNESBURG - After several days of new information showing the economy is slowing, government and economists are waiting to see if the world's two big ratings agencies will downgrade South Africa tomorrow.
Yesterday, the World Bank said it was cutting its economic growth forecast for the economy this year to two percent.
It shrank in the first quarter of this year largely due to the ongoing platinum strike.
Earlier this week, Association of Mineworkers and Construction Union and platinum producers announced wage talks had deadlocked.
Nedbank economist Isaac Mathsego said if South Africa is downgraded it will make it more expensive for government to borrow money.
"International markets will adjust and South Africa is higher risk so we must charge the people higher premiums and the cost to government borrowing internationally will go up."
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