The Democratic Alliance welcomes the fact that Moody’s released its credit opinion on South Africa, and that South Africa has been given another lifeline.
The release of the Moody’s credit opinion was originally withheld, which caused great concern among investors and plunged the economy into even further uncertainty. As such the DA wrote to Moody’s on the 1st of April 2019 to request that they release their credit opinion on South Africa. The DA welcomes Moody’s response in this regards.
Among the factors that would lead to a junk status downgrade is if government debt levels and contingent liabilities from state-owned entities continue to rise at unsustainable levels and if growth over the medium term persists at very low levels as recorded in 2018.
The DA’s Fiscal Responsibility Bill can ensure that debt and contingent liabilities do not continue to spiral out of control. Together with the party’s focus to get the economy growing and to put a job in every home, a DA national government would change the trajectory of South Africa’s credit rating and for South Africa to be upgraded far above junk status.