Minister of Finance, Tito Mboweni and the National Treasury will brief the media on the recent announcements by Moody’s and Fitch to downgrade South Africa’s sovereign credit ratings.
The virtual media briefing will also cover recent interventions made by National Treasury to assist in limiting the economic impact of the coronavirus outbreak.
Last Friday, Fitch downgraded South African ‘s debt further into junk territory adding to its misery, a week after Moody’s removed its investment-grade credit assessment.
Fitch cut the rating one notch from BB+ to BB because it lacked a clear path towards stabilising its debt position, a situation that would be worsened by the effect of the COVID-19 shock on economic growth and public finances.
Mboweni has acknowledged that non-investment grade ratings have undesirable implications for the whole economy.
The Democratic Alliance has also called on Mboweni to table an emergency budget, arguing that the one tabled in February is irrelevant given the devastation the economy is now suffering.
In the video below, Economist Lavan Gopaul analyses Moody’s ratings outlook:
Mboweni will have a difficult task
Economist Dawie Roodt says Mboweni will have a difficult task of explaining the lack of economic growth in the midst of the credit downgrades and the coronavirus epidemic.
Roodt says, “What he plans to do with the spending, in other words will there be more money made available for various things? We’ve heard that they are planning to launch some kind of food programme. I think we’ll get more information about that and where the money is going to come from for that. I can assure you that there’s very little money available and of course some boring numbers that economists will be looking out for regarding economic growth and the debt situation as well.”
The graphic below gives information about coronavirus protective measures: