Moody's says South African rating change unlikely soon

19 May 2015 - 12:52 By REUTERS

South Africa is stronger than its peers with a stable outlook despite various challenges and a ratings change is therefore unlikely in the foreseeable future, Moody's said on Tuesday. Moody's analysts Kristin Lindow however reiterated last week's warning that Africa's most advanced economy could be downgraded if the official commitment to fiscal consolidation and debt stabilization falters, or if the investment climate deteriorates further. ID:nL5N0Y3460]"We see South Africa as being somewhat stronger than its peers and really in a situation where despite challenges it is unlikely to see much in the way of ratings changes for the foreseeable future," Lindow told a conference in Johannesburg.Factors that could lead to a higher rating were "relatively pie in the sky", she added, singling out successful implementation of structural reforms to enhance potential growth and reduce exposure to external shocks, combined with continued fiscal prudence.Moody's downgraded South Africa to Baa2 from Baa1 in November, citing poor prospects for medium-term growth and rising public debt in the continent's most advanced but ailing economy.Baa2 is two notches from speculative or "junk" grade, and some analysts are expecting a downgrade to come soon as Moody's looks to align its rating with peers Standard and Poor's and Fitch.Moody's is due to issue its next review on Africa's most advanced economy in June.South Africa's government has said its economic growth forecast for 2015 could halve to 1 percent from 2 percent because of power constraints. The government has said South Africans should brace for three years of power disruptions. ..

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