Moody’s places SA ratings on review for downgrade

epa03596305 (FILE) A file picture dated 13 July 2011 shows the Moody's logo outside the offices of Moody's Corporation in New York, New York, USA. The ratings agency Moody's on 22 February 2013 lowered Britain's top AAA credit rating to AA1, citing a weak economy and rising debt. EPA/ANDREW GOMBERT

JOHANNESBURG – South Africa is a step closer to junk status.

It’s been placed on review for a ratings cut by Moody’s.

The ratings agency says the decision follows increasing risks to the country’s economic prospects.

That’s despite the tighter fiscal policy announced in last month’s budget.

Moody’s will assess the extent to which government policy can stabilise the economy.

That’s amid increasing volatility at home and abroad.

Moody’s will visit the country later this month to meet with government officials.

The agency will look into the likelihood of a reversal in the country’s economic decline.

It’s 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.

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