Moody’s to look at political infighting & unemployment as key factors

The agency said it was concerned about a number of factors, and these would be taken into account.

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JOHANNESBURG – Political infighting, economic growth and unemployment are some of the factors that Moody’s says it’s been considering when assessing the country's rating.

The agency is set to announce its decision on Friday on whether it will keep its rating unchanged at BAA2 with a negative outlook.

A few months ago the agency said it was concerned about a number of factors and these would be taken into account.

Reserve Bank Governor Lesetja Kganyago has announced that growth for this year is expected to remain at around 0.4% but that overall, the outlook is set to improve.

Economist at Argon Asset Management Thabi Leoka says while she doesn't expect a downgrade, agencies are looking at a few other issues.

“They’re obviously worried about certain issues such as the inability for South Africa to grow the economy, labour issues and obviously politics is increasingly becoming an issue.”

Nedbank economist Isaac Matshego says he also doesn’t expect a downgrade but says Moody’s will single out growth as a problem.

“We really need to start turning around growth for us to deal with our socio-economic challenges.”

The Reserve Bank expects growth to climb above one percent next year.

(Edited by Leeto M Khoza)