South Africa’s Growth Forecast In Doubt

Credit ratings agency Moody’s has lowered South Africa’s GDP growth projects for 2019 from 1.3% to 1% following reports of a quarterly decline of 3.2% last week.

Commenting on the decision, Moody’s lead sovereign analysis for South Africa Lucie Villa stated “The quarterly decline, the largest in 10 years, is credit negative for the Government of South Africa’s (Baa3 stable) revenue and policy options.”

Villa noted that the assumption is that economic activity will recover following last months elections, however the contraction in the first quarter has had a big impact.

The news comes following a warning by ratings firm S&P Global last week that the country risks another downgrade as a result of slow growth and policy uncertainty stemming from political infighting.