JOHANNESBURG — Moody’s ratings agency representatives are expected to arrive for a two-day visit in South Africa on Wednesday.
The rating agency will during its visit, assess the extent to which government policy can stabilise the economy.
Its Review Season… SA placed under review by Moodys. Nigeria also under review by the agency, they sit on Ba3 (3 levels BELOW junk status)
— Arabile Gumede (@ArabileG) March 9, 2016
This follows the announcement of belt-tightening fiscal policy in last month’s budget speech by Finance Minister Pravin Gordhan.
The agency will look into the likelihood of a reversal in the country’s economic decline.
#PravinGordhan ;'Moodys has us 2 notches above sub-investment grade. So even if we do get a downgrade, it'll be in line with other agencies'
— Thulasizwe Simelane (@ThulasSims) March 14, 2016
It is also concerned about the impact of the drought, low commodity prices and labour unrest.
Last year, growth fell to 1.3 percent, the slowest pace since 2009.
Growth is expected to fall further this year.
Moody’s visit also comes as the Finance Minister is embroiled in a spat with the Hawks.
In February the investigative unit sent Minister Pravin Gordhan 27 questions relating to an alleged rogue unit that operated during his tenure at the South African Revenue Service (SARS).
Last night, his office said his lawyers were formulating a response, having missed the Monday deadline to answer their questions.
Two other ratings agency, Fitch and Standard & Poors (S&P) are expected to conduct their own reviews of the country’s economic status in June.