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Economists: Moody’s decision to change SA’s outlook to negative was expected

The rating agency has changed its outlook on the country’s credit rating from the stable to negative but has affirmed the BAA3 long-term foreign and local currency rating.

Moody's Investors Service. Picture: Facebook.

JOHANNESBURG - Economists said Moody’s current rating to South Africa did not come as a surprise.

The rating agency has changed its outlook on the country’s credit rating from the stable to negative but has affirmed the BAA3 long-term foreign and local currency rating.

Chief economist Kavin Links said the latest rating was nothing new given the current economic situation in the country.

“It seems to me the decision by Moody’s to change the credit rating outlook for South Africa has come about due to the significant deterioration that the minister released in his Medium-Term Budget Policy Statement.”

Another economist Duma Xubile said this was expected.

“The budget had nothing on how we’d grow the economy to reduce debts. The rand had actually declined the day before Moody’s announcement.”

The BAA3 three rating affirmation takes into account the country’s deep-stable financial sector and robust macroeconomic policy framework.

Meanwhile, Finance Minister Tito Mboweni has acknowledged Moody’s rating with a heavy heart, saying he hoped for a different outcome.

“Fellow South Africans, now is the time to roll up our sleeves and do what we have to do. It’s now or never. We need all hands on deck. Government, labour, business and civil society, we need each other now more than ever. The country is ours and it is only us who can turn it around,” Mboweni said in a statement.

Meanwhile, Business Unity South Africa (Busa) said it was not surprised by Moody’s announcement.

Busa president Sipho Pityana said they warned for months that the country needed drastic and fundamental action on key economic issues.