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Moody's changes South Africa's outlook to stable, confirms ratings


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Moody's changes South Africa's outlook to stable, confirms ratings

Moody's changed South Africa's outlook to stable and confirmed the long-term issuer and senior unsecured ratings at Baa3 after placing them on review for downgrade in November 2017.

The confirmation reflects the rating agency's view that the previous weakening of the country's institutions, including Treasury, the South African Revenue Service and key state-owned enterprises, will gradually reverse under a more transparent and predictable policy framework.

Sustained recovery in the institutions will in turn support improvement in the economy and fiscal stabilization, Moody's said.

The rating agency also cited improved growth performance and prospects, and fiscal adjustment plans that will help stabilize and reduce the nation's debt burden.

The stable outlook reflects a careful balance of risks, according to the rating agency. To sustain South Africa's economic and fiscal prospects, the government should make steady progress in meeting the objectives set out in the recent state of the nation address by the country's president, Moody's said.