She is not expected to downgrade South Africa's sovereign credit rating despite the economy being in recession economists believes that the agency may choose. To wait until after the medium-term budget policy. Statement expected to be delivered in three weeks time newly appointed finance minister Tito Mohini will face the task of affirming government's commitment to fiscal consolidation and strategic investment. In the face of low economic growth Moody's has South Africa's credit ratings its investment grade level with a stable outlook rating agencies have been concerned about. The low economic growth levels contingent liability posed by state-owned enterprises and commitment to fiscal consolidation government has moved to introduce the stimulus package expected to move funds to sectors that will inspire economy activity and job creation on the policy certainty front a new. Mining charter has. Been introduced as well as the new visa regime expected to boost tourism the panel to advise government on land reform has also been appointed the three priority areas that the credit. Rating agencies will be looking out. For is one a continued commitment to fiscal consolidation two reforms in state-owned enterprises and three measures that will lift South Africa's economic growth trajectory if the October budget effectively addresses all three priority areas the credit rating agencies will likely view the budget in a favorable light downgrade. Of South Africa's debt to sub. Investment great would spell disaster for the country if it happens South Africa would be removed from the city world government bond index prompting asset managers and pension funds to sell domestic bonds this would. Sharply increase the cost of debt and put more pressure on the local currency and the economy in recession presents a downside risk put enormous pressure on the viscous and. Especially in in a process of fiscal consolidation there are some very difficult prioritization to say that need. To be made so the National Treasury still expected in February that South Africa would achieve growth of 1.5 percent this year but given that we grew by 0.6 percent in the first half of the year on average we would have to grow 2.4 percent in the second half and that doesn't seem likely. At this point. Thurston believes the National Treasury will likely revised downwards its growth expectations for. 2018. Philosopher Camus CA CBC. News Johannesburg.
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