There has been a collective sigh of relief after rating agency Moody's raised South Africa's outlook to stable, keeping the overall rating unchanged on Friday.
Moody's stated that 'the previous weakening of South Africa's institutions will gradually reverse under a more transparent and predictable policy framework.'
Dr Azar Jammine, Director and Chief Economist of Econometrix, speaking to Ray White says he doesn't think that other rating agencies will follow suit.
I derive that from listening to a presentation made by the head of Standard and Poor's Global a month ago, in which he basically said that S&P dowgraded us to junk status because they got sick and tired of the fact that we kept pushing out the date which we intended to embark upon fiscal discipline and reduce our budget deficit and our public debt to GDP ratio.— Dr Azar Jammine, Director and Chief Economist of Econometrix
Jammine says South Africa kept pushing it out further and kept promising fiscal discipline and yet the ratio of public debt to GDP just kept rising.
Listen further to the interview below: