Ratings agency Moody’s cut its forecast for South Africa’s economy to a 6.5% contraction in 2020, and said the country’s 500 billion rand ($26.29 billion) rescue package will weaken its public finances and constrain government’s ability to provide support to state-owned firms.
Moody’s cut its GDP forecast from a 2.5% contraction it predicted last Tuesday, saying in a research report on Friday economic growth will recover by 4.5% in 2021.
On Tuesday President Cyril Ramaphosa announced the package, equivalent to 10% of the GDP of Africa’s most industrialised nation, to try to cushion the economic blow of the coronavirus pandemic.