Mboweni’s Budget unlikely to stop SA’s march to junk, say economists
Finance Minister Tito Mboweni’s Budget this week is unlikely to convince Moody’s Investors Service that he has a credible plan to rein in government debt.
Of 19 economists surveyed by Bloomberg this month, 14 expect Moody’s to downgrade the country to junk this year and nine of those say it’ll happen in the first half. That’s after the rating company in November cut the outlook on the nation’s assessment to negative and said it would look to the February 26 budget for a feasible strategy to contain rising debt.
Bailouts for state-owned companies including Eskom and South African Airways have pushed up government debt in an economy that’s growing at less than 1% a year and not collecting enough revenue.
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