SLOW ECO­NOMIC RE­COV­ERY EX­PECTED FOR SA

The Witness - - YOUR MONEY -

A RE­COV­ERY in eco­nomic growth will be slow and less than the Trea­sury’s es­ti­mate of 1,5% for 2018 fol­low­ing a sur­prise con­trac­tion in the first two quar­ters, rat­ings agency Moody’s said yes­ter­day.

“Growth is go­ing to be be­low one per­cent, to what ex­tent it’s dif­fi­cult to say,” Lu­cie Villa, Moody’s lead an­a­lyst for South Africa, told the agency’s an­nual Sub-Sa­ha­ran Africa con­fer­ence, re­fer­ring to this cal­en­dar year.

Villa said the ris­ing share of gov­ern­ment rev­enue that South Africa spends on debt ser­vic­ing was a con­cern for Moody’s, but that she ex­pected some fis­cal ad­just­ment in the Oc­to­ber bud­get state­ment.

She said two rat­ings strengths for South Africa was that its gov­ern­ment debt had a long ma­tu­rity and that rel­a­tively lit­tle of the debt was for­eign-cur­rency de­nom­i­nated.

Moody’s has said the slide into re­ces­sion in the sec­ond quar­ter would ex­ac­er­bate fis­cal and mon­e­tary chal­lenges. — Reuters.

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