Moody’s downgraded South Africa’s sovereign credit rating to “junk” status on Friday, heaping more misery on an economy already in recession and now staring down the barrel of a steep contraction over the global coronavirus pandemic.
The ratings firm downgraded the rating one notch to ‘Ba1’ from ‘Baa3’ and maintained a negative outlook, meaning another downgrade could follow if the economy performs worse or government debt rises faster than expected.Moody’s said the main driver behind the downgrade was “the continuing deterioration in fiscal strength and structurally very weak growth”.
Moody’s left South Africa on the brink of junk in November after it revised the outlook on its rating to negative following a bleak mid-term budget.
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