Global investors are keeping an eye on South Africa as it teeters on the brink of possible downgrades from credit rating agencies, Finance Minister Pravin Gordhan said on Monday afternoon.<\/p>\n
He was addressing a media briefing at the JSE to report back on the roadshow government, business and labour representatives held in London, Boston and New York last week.<\/p>\n
He said the delegation met with 250 investors to discuss the economic situation of the country, which the International Monetary Fund forecasts will experience gross domestic product growth of just 0.7% this year.<\/p>\n
\u201cThe key message is that the world is watching South Africa very carefully,” said Gordhan.<\/p>\n
South Africans must be aware that “we need to provide very concrete evidence over the next few months that we’re not just talking\u201d, he said.<\/p>\n
Amid slower growth and rising inflation in the country, rating agency Moody\u2019s said last week that it will visit South Africa from March 16 to 18 before making a decision on its investment status.<\/p>\n
This comes after Moody\u2019s put South Africa on an intense watch for a possible downgrade to one notch above junk status.<\/p>\n
“On the downgrade, one thing we must clarify is that Moody’s has us two notches above sub-investment grade,\u201d said Gordhan, referring to South Africa\u2019s proximity to junk status.<\/p>\n
Meanwhile, rating agencies Standard & Poor\u2019s and Fitch have South Africa on one notch above junk status on their scales.<\/p>\n
Despite looming downgrades, Gordhan said the international investment community still has “confidence that as a leadership team we have the ability and resources to put our economy on a higher road to growth\u201d.<\/p>\n
\u201cWe are not the worst off in the world… there are many countries that are in a worse position than ourselves,” said Gordhan.<\/p>\n
“What’s our plan if we get downgraded? Get upgraded. But we don\u2019t want to end up there as a country,” he said.<\/p>\n
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