The decision by FICO ratings agency Moody’s Investment Service to downsize SA’s rating viewpoint from ‘stable’ to ‘negative’ shows that financial minister Tito Mboweni’s midterm budget did not go nearly far enough in getting debt under control and reining in the budget deficit, the DA says.
It is also another stark warning on the threats that lie ahead of the nation doesn’t institute urgent reforms, the party’s spokesperson on finance, Geordin Hill-Lewis, said in a statement on Saturday.
He included that higher borrowing costs make it harder to invest, slowing down economic growth even more.
“This is a lethal combination for employment,” Hill-Lewis said
Friday’s decision by Moody’s, he stated, made reference to low financial development, broadening spending deficiencies and rising obligation levels as the triple headwinds that would sink the nation’s FICO assessment. This was absolutely why the DA, in its pre-MTBPS proposition introduced on Monday, underlined that legislature couldn’t stand to keep putting off difficult decisions needed to turn around the economy.
“SA is paying a heavy price for the policy paralysis in government. The more the government dithers and procrastinates, the more this crisis will worsen. What is needed now, as explained in the DA’s MTBPS proposals, are bold and concrete steps that will rein in the public sector wage bill, address Eskom dysfunction and stop government profligacy,” Hill-Lewis said.