There are concerns that South Africa’s economy could enter into another recession.
Statistics South Africa will on Tuesday morning release growth figures for fourth quarter of 2019.
— South African Government (@GovernmentZA) March 3, 2020
The return of load shedding in October is expected to have had an impact on growth in the months from October to December.
Video | Impact of load shedding on SA’s economic growth:
A recession is defined as two consecutive quarters of negative growth, a situation South Africa last entered in the second quarter of 2018.
The economy’s overall growth for 2019 is expected to be lower than the 0.8% recorded in 2018.
Later in March, Moody’s will release its latest assessment of the country.
Moody’s is the only ratings agency which has not lowered the country’s status to sub-investment grade.
In 2019, Moody’s affirmed SA’s long-term foreign and local currency debt ratings at ‘Baa3’
South Africa’s deteriorating debt ratios and weak economic growth are major concerns for ratings agencies. S&P Global Ratings, which already has government debt at sub-investment grade, changed South African’s outlook from stable to negative.
Video below is analysis of Moody’s ratings outlook:
Moody’s rating agency earlier in November affirmed the country’s long-term foreign and local currency debt ratings at ‘Baa3’ and revised the outlook to negative from stable.
South Africa is at risk of being excluded from the Citigroup’s World Government Bond Index if no meaningful action is taken to turn the economy around. Moody’s is expected to issue a review of South Africa early next year following the February budget.
S&P revised down outlook on South Africa’s debt from positive to negative
Meanwhile, S&P revised down the outlook on South Africa’s debt from positive to negative.
Standard and Poor’s has cited a worsening fiscal and debt trajectory for its latest decision.
In October, the only rating agency to have South Africa still in investment grade, Moody’s also changed the country’s outlook from positive to negative.
Fitch cut the country’s assessment to junk in 2017.