Moody’s assigns negative view for South Africa

Moody’s Investors Service said it confirmed South Africa’s Baa2 long-term government bond and issuer ratings, as well as its provisional Baa2 and provisional P-2 shelf and medium-term note program ratings.

A negative outlook also was assigned.

The confirmations and negative outlook assignment conclude a review for downgrade that began in March, Moody’s said.

The ratings reflect a view that the country is likely approaching a turning point after several years of falling growth, the agency said.

The country’s 2016-2017 budget and medium-term fiscal plan will likely stabilize and eventually reduce the general government-debt metrics, Moody’s said.

Recent political developments, while disruptive, testify to the underlying strength of South Africa’s institutions, the agency added.

The negative outlook reflects the implementation risks associated with the structural and legislative reforms that the government, business and labor recently agreed to in order to restore confidence and encourage private-sector investment, Moody’s explained.

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