Moody’s reduces South Africa’s GDP growth forecast by 0.3%

Moody’s, a credit ratings firm has trimmed its economic growth forecast for South Africa by 0.3 percent.

The firm forecasts South Africa’s economy in terms of GDP, will now grow by 0.7 percent in 2019.

This is in contrast with its June forecast of 1.0 percent, saying a slowdown in global and regional growth would impact negatively on government tax revenue and hurt growth.

Moody’s, which assigns South African debt its only remaining investment-grade rating, sees gross domestic product growth in 2020 of 1.5 percent. This was revealed by the firm’s associate managing director for financial institutions Antonello Aquino on Tuesday at a credit conference in Johannesburg.

Read Also: South Africa cuts key rate for first time in over a year

On the credit agency’s outlook for banks, it said, outlook for South African banks is stable on sound finances despite weak economic growth. “The outlook expresses our expectation of how bank creditworthiness will evolve over the next 12-18 months,” the firm said.

It added that, banks’ capital will remain resilient and profitability will stay firm, while problematic loans will rise marginally, but stay below 4 percent.