Moody’s: Strength of SA's finance sector balances well against weak growth
Moody's said that the country is still facing a few major problems, including persistently low growth and high unemployment.
JOHANNESBURG - Rating agency Moody’s has again highlighted the strength of the country's core institutions and financial sector, saying that this balances well against weak growth.
However, it adds that there is concern about the country's debt, saying that it could hit 65% of GDP over the next five years.
The agency has released a research report, looking at South Africa's economic strengths and weaknesses.
A few weeks ago, Moody’s declined to officially pronounce on the country's sovereign rating and instead simply kept the country one notch above junk status.
It now said that the country is still facing a few major problems, including persistently low growth and high unemployment.
Added to this, Moody's said that government debt is expected to remain on an upward trajectory.
It said that deep inequalities also add to tensions that feed into political risk and hamper the progress of reforms that would unlock economic potential.
However, the agency said there are a number factors that balance the negatives, including the country's strong financial institutions, and it expects the country's rating to stay in line with other nations in the same position.
(Edited by Mihlali Ntsabo)