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Reacting to the news, Finance Minister Tito Mboweni said there is an urgent need for the government and its social partners to implement structural reforms to avoid further damage to the country’s sovereign rating.
The Minister of Finance, Tito Mboweni, delivered his supplementary budget on June 24, 2020. Image: GCIS
JOHANNESBURG – Finance Minister Tito Mboweni said the decision by rating agencies Fitch and Moody’s to further downgrade South Africa to junk status was painful.
Moody’s downgraded the country’s credit rating one notch to BA2 and maintained a negative outlook.
• Moody’s & Fitch downgrades push SA further into junk status
He cited an expected weakening of South Africa’s fiscal position as part of the reasons for his decision.
Meanwhile, Fitch has downgraded the country from BB to BB- with a negative outlook, highlighting high and rising public debt, along with weak growth and exceptionally high inequality.
However, S&P Global decided to keep its ratings unchanged at BB- for its foreign currency rating and BB for its local currency, both with a stable outlook.
Reacting to the news, Mboweni said there is an urgent need for the government and its social partners to implement structural reforms to avoid further damage to the country’s sovereign rating.
The National Treasury is also urging South Africans to continue to comply with all COVID-19 regulations to avoid a second wave of infections, which could have devastating effects on the economy of the already limping country.
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