Ratings agency Moody’s has kept South Africa at its current rating of BAA3, a level up from sub-investment grade, in good news for the country following speculation that a downgrade may be imminent following our recent energy woes.
Moody’s positive outlook regarding SA’s financial situation is the result of what it describes as a diversified economy, solid macro-economic policy framework and large amount of domestic investors.
The agency believes SA could be on the path towards a modest growth of 1.3%.
This follows the agency’s decision not to make an announcement on SA’s sovereign rating this past Friday.
It’s not all good news for South Africa, however, with the agency noting SA’s energy crisis and expressing the view that government’s plans to save Eskom may prove “insufficient to address the company’s long-standing financial troubles”.
This recent pronouncement by Moody’s was a credit opinion rather than a ratings review and our credit profile remains unaltered.
Moody’s is known for being the kindest ratings agency towards SA, being the only one who still considers the country to be at investment grade.