Gigaba to give clarity on way forward for SA economy after Moody's downgrade

Following Moody’s announcement, the Treasury said it recognised that the agency had cited the weakening of South Africa’s institutional strength.

FILE: Finance Minister Malusi Gigaba. Picture: Christa Eybers/EWN

JOHANNESBURG – Finance Minister Malusi Gigaba says he will give clarity on Monday on the way forward for the country's economy.

On Friday night, Moody’s announced its decision to drop its rating a notch to Baa3 with a negative outlook.

About 10 days ago, Standard & Poor’s Global and Fitch kept their ratings at BB+ with Standard & Poor’s Global rating the local currency at BBB-.

The Finance Ministry says Cabinet has endorsed a full briefing by the minister to inform the public of the measures government intends taking to address the problems facing the economy.

Following Moody’s announcement, the Treasury said it recognised that the agency had cited the weakening of South Africa’s institutional strength.

Moody’s also says there are reduced growth prospects relating to policy uncertainty.

Added to this, there is also the continued erosion of fiscal strength due to rising public debt and contingent liabilities.

The Treasury says that while Moody’s rating is still investment grade there are more risks of downgrades.

(Edited by Leeto M Khoza)