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Moody’s Cuts South Africa Growth Forecast for 2019
- Moody’s Cuts South Africa Growth Forecast for 2019
International rating agency Moody’s Investors Service has joined the number of agencies predicting lower growth rate for South Africa in 2019.
Africa’s second-largest economy contracted by the most in 10 years in the first quarter amid power outages that plunged its economic productivity.
The economy contracted by 3.2 percent in the quarter, putting 1.3 percent projected by experts for 2019 in doubt.
A few days later, Moody’s announced it had lowered the country’s growth projection for 2019 from 1.3 percent to 1.0 percent after its poor first quarter number.
“The quarterly decline, the largest in 10 years, is credit negative for the Government of South Africa’s (Baa3 stable) revenue and policy options,” Lucie Villa, Moody’s lead sovereign analyst for South Africa, wrote in a research report.
“The first-quarter contraction presages low growth in the year as a whole,” Villa added.