Parastatals' credit review a warning sign for SA's credit rating?

Credit ratings agencies will in December make their ratings decisions on the country’s sovereign rating.

Moody's. Picture: Facebook

JOHANNESBURG - Economists believe a decision by Moody's to place five state owned entities on review for a downgrade may be an indication of what global agencies are thinking about South Africa's credit rating.

Moody's is warning that political infighting, weak economic growth and mounting debt at state-owned companies all pose a risk to South Africa's credit rating.

Economist Xhanti Payi says this week's action by Moody's could be an indicator of what South Africa should expect from ratings agencies in December.

"The medium term budget policy statement that is going to be tabulated will be quite instructive in making sure that fiscal policy continues on the right path, and I do think while there are risks of a downgrade on the sovereign it can easily be delayed until later."

LISTEN : Moody's to review state entities