Moody's sees slower fiscal progress for SA than government predicted

The investor service has pegged the country's fiscal debt at four percent of GDP.

Moody’s Investors Service has said that South Africa’s fiscal consolidation will be slower than the government estimates, due to weak economic growth and a high public-sector wage bill.

Moody’s said in a statement:

“Growth this year is expected to be lower than the government’s own estimates, weighing on tax revenues, while the public-sector wage agreement in June also brings extra, unbudgeted cost. Medium-term deficit targets remain within reach and, if met, will support a stabilisation of debt levels.”

Moody’s sees the country’s fiscal deficit at around 4 percent of GDP in the year through March 2019, compared to the state’s February budget forecast for a 3.6 percent gap.