National Treasury has noted rating agency, Moody’s decision to downgrade South Africa’s sovereign credit rating to junk status.
Treasury says the negative outlook reflects the risk – that economic growth will prove even weaker and the debt burden will rise quicker than currently expected.
Moody’s is the last of the big three agencies to do so after S&P Global and Fitch moved the rating to below investment grade in 2017.
In a statement, National Treasury says the decision to downgrade comes amid the country facing the coronavirus outbreak – which is impacting various sectors of the economy including the financial markets.
However Finance Minister Tito Mboweni has called for South Africans to unite and work together and address the challenges.
Government has urged people to remain positive and continue to work to help turn the economy around.
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.