Moody's keeps South Africa's negative outlook
"The negative outlook on South Africa's Baa2 government bond rating reflects risks related to the implementation of structural reforms aimed at restoring confidence and encouraging investment, upon which Moody's bases its expectations for a gradual growth recovery and debt stabilization in coming years."
The negative outlook also recognizes the downside risks associated with political uncertainty and low business confidence as well as the challenging external environment characterized by low growth, investment and trade, Moody's said.
South Africa's rating would likely be downgraded in the absence of fundamental structural reforms supporting higher and sustainable medium term growth, the agency warned.
Continued accumulation of public debt and contingent liabilities in terms of GDP would also put downward pressure on ratings, said Moody's. ■