SOUTH Africa fell deeper into junk territory after Moody’s Investors Service joined Fitch Ratings in lowering the country’s credit ratings on Friday.
Moody’s cut the nation’s foreign- and local-currency ratings to Ba2, two levels below investment grade, from Ba1. The outlook remains negative. Fitch cut the nation’s foreign- and local-currency ratings to BB-, three levels below investment grade, from BB, also with a negative outlook.
“The key driver behind the rating downgrade to Ba2 is the further expected weakening in South Africa’s fiscal strength over the medium term,” Moody’s said in a statement. Fitch said in a separate release that “the pandemic has severely hit South Africa’s economic growth performance, and GDP is expected to remain below 2019 levels even in 2022.”
Only five of 23 economists surveyed by Bloomberg predicted Moody’s to cut the rating.
Finance Minister Tito Mboweni’s medium-term budget last month showed plans to pare the government
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