Johannesburg - Moody's Investors Service has changed the outlook on South Africa's A3 local and foreign currency government debt ratings to negative from stable, reflecting heightened political risk in the context of more constrained public finances.
The negative outlook also applies to the country's A1 foreign currency debt ceiling and its A3 foreign currency deposit ceiling.
The rating agency said the main drivers for the negative outlook include:
The growing risk that the political commitment to low budget deficits and the ability to keep within current debt targets could be undermined by popular pressures and rising internal strains within the ANC, and between the ANC and its partners in the tripartite alliance.
Expectations that growth will be somewhat slower than previously anticipated and limited to about 3% to 3.5% over the medium term - insufficient to prevent already high unemployment rates from rising further and thereby exacerbating social tensions.
The continued negative impact on private investment deriving from calls for interventionist actions aimed at "quick fixes" for black economic opportunities.
