{"id":91594,"date":"2025-10-15T14:53:40","date_gmt":"2025-10-15T14:53:40","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss"},"modified":"2025-10-15T15:17:43","modified_gmt":"2025-10-15T15:17:43","slug":"south-africa-headed-for-a-critical-miss","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss","title":{"rendered":"South Africa headed for a critical miss"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>South Africa\u2019s gradual structural reforms are breathing life into the economy, but aren\u2019t sufficient to lift the growth rate to the government\u2019s 3.5% target, according to Moody\u2019s Ratings.<\/p>\n

Africa\u2019s largest economy has grown less than 1% annually for more than a decade, hamstrung by dilapidated infrastructure, electricity shortages, logistics bottlenecks, crime and corruption.<\/p>\n

A coalition government formed after the African National Congress lost its majority in last year\u2019s national elections has prioritised reforms as it seeks to spur growth to as much as 3.5% by 2030.<\/p>\n

\u201cWe don\u2019t see in our baseline that the current reform progress to date \u2014 and our expectation of how reforms will progress \u2014 will be sufficient to raise economic potential beyond 2%<\/b>,\u201d Evan Wohlmann, Vice President \u2013 Senior Credit Officer at Moody\u2019s, said in an online briefing on Tuesday.<\/p>\n

A study conducted by Investec Wealth & Investment International found that the economy is at least 37% smaller than it would have been had it tracked its emerging-market peers and sustained annual growth of 4.5% since 2010.<\/p>\n

Most economists put South Africa\u2019s growth trajectory for 2025 at between 0.8% and 1.2%, climbing to above 1.5% in 2026.<\/p>\n

Helping the growth outlook was a surprising second quarter GDP figure, which saw the economy grow at 0.8% against projections of 0.5%. First quarter growth was marginal at only 0.1%.<\/p>\n

While South Africa has been hit by global trade wars and punitive tariffs from the United States, the impact has not yet fed through to industry numbers, leading to some hope that it won\u2019t be as bad as expected.<\/p>\n

On the consumption side of the economy, households have been spending more thanks to higher salaries and lower interest rates\u2014though they remain under pressure.<\/p>\n

Nevertheless, no one is forecasting a return to 3% growth in the near-term, especially not without wide-sweeping economic reforms.<\/p>\n

Moody\u2019s expects South Africa\u2019s output to expand by 1% this year and 1.6% in 2026. The malaise is likely to impact the government\u2019s efforts to manage its finances, Wohlmann said.<\/p>\n

\u201cIn our view it will be challenging for South Africa to achieve a meaningful decline in general government debt without significantly higher economic growth than is forecast under our baseline,\u201d he said.<\/p>\n

Still a junk economy<\/b><\/p>\n

The bleak outlook for the country also means that it is unlikely to crawl its way out of junk\u2014or sub-investement grade\u2014status any time soon.<\/p>\n

South Africa lost its investment grade rating from Moody\u2019s in March 2020.<\/p>\n

South Africa needs to find ways to boost economic growth if it wants to get its credit rating heading back to the investment grade threshold it lost half a decade ago, the group said.<\/p>\n

\u201cAny conversation about South Africa\u2019s sovereign credit outlook needs to start with economic growth,\u201d Wohlmann said.<\/p>\n

\u201cThere will be upward pressure on the rating if we see South Africa making significant progress in alleviating structural constraints on economic potential.\u201d<\/p>\n

Moody\u2019s next review of South Africa\u2019s credit rating is scheduled for 5 December. It currently rates South Africa at Ba2, with a stable outlook.<\/p>\n

Weak investment remains a hindrance.<\/p>\n

Foreign direct investment in the country fell to $2.5 billion in 2024, its lowest in seven years and down 29% from 2023, according to the United Nations Conference on Trade and Development\u2019s World Investment Report 2025.<\/p>\n

Moody\u2019s said private infrastructure investment remains insufficient to lift South Africa\u2019s potential growth significantly beyond 2%.<\/p>\n

Wohlmann cautioned that the rating could face downward pressure if economic growth prospects were to deteriorate, resulting in weakened fiscal strength or setbacks in structural reforms that point to diminished policy effectiveness.<\/p>\n

Ratings agency S&P rates South Africa at \u2018BB-\/B\u2019 and has a \u201cpositive\u201d outlook, while Fitch has a BB- rating on South Africa, also with a stable outlook.<\/p>\n

Source: businesstech<\/b><\/p>\n

For More News And Analysis About South-Africa<\/span> Follow Africa-Press<\/span><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. South Africa\u2019s gradual structural reforms are breathing life into the economy, but aren\u2019t sufficient to lift the growth rate to the government\u2019s 3.5% target, according to Moody\u2019s Ratings. Africa\u2019s largest economy has grown less than 1% annually for more than a decade, hamstrung by dilapidated infrastructure, electricity shortages, logistics bottlenecks, crime and […]<\/p>\n","protected":false},"author":84,"featured_media":91593,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,6,7],"tags":[275],"class_list":["post-91594","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-files","category-head-lines","tag-south-africa-2"],"yoast_head":"\nSouth Africa headed for a critical miss - South Africa<\/title>\n<meta name=\"description\" content=\"South Africa\u2019s gradual structural reforms are breathing life into the economy, but aren\u2019t sufficient to lift the growth ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"South Africa headed for a critical miss\" \/>\n<meta property=\"og:description\" content=\"South Africa\u2019s gradual structural reforms are breathing life into the economy, but aren\u2019t sufficient to lift the growth ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2025-10-15T14:53:40+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-10-15T15:17:43+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/10\/sm_1760528820.511365.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"783\" \/>\n\t<meta property=\"og:image:height\" content=\"464\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"South Africa headed for a critical miss\",\"datePublished\":\"2025-10-15T14:53:40+00:00\",\"dateModified\":\"2025-10-15T15:17:43+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss\"},\"wordCount\":635,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2025\/10\/sm_1760528820.511365.jpg\",\"keywords\":[\"South-Africa\"],\"articleSection\":[\"all news\",\"files\",\"head lines\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/south-africa-headed-for-a-critical-miss\",\"name\":\"South Africa headed for a critical miss - 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