Economist Dawie Roodt says South Africa can brace for a possible further downgrade from international credit rating agencies, following the greylisting of the country.
Roodt says this is usually what happens to other countries that are greylisted by the Financial Action Task Force, which is an international watchdog on financial crime.
The South African government says it has eight outstanding recommendations to address while sixty-seven deficiencies that were flagged by the financial watchdog have been addressed.
Roodt says South Africa might well face credit rating downgrades.
“Quite often what happens is that if there is a greylisting of a country, that quite often goes hand in hand with a downgrade. Now, I listened to the Minister of Finance on his budget speech as an example or the day before his budget speech. He’s got a trajectory on certain of those fiscal matrix, like for example like in a deficit relative to the GDP. And with an economy that is not growing or perhaps performs much weaker than what the Minister expected, it may downgrade in any event. And on top of it we got the greylisting, so I’m afraid chances are quite good that we could see a further downgrade.”