Rating agency Moody's, as expected, downgraded its outlook for South Africa's last investment-grade credit rating to 'negative' late on Friday, bringing its descent into complete 'junk status' one step closer.
It is all happening in slow motion, but inexorably South Africa is lining up its ducks so that Moody's will have no choice but to pull the trigger and complete the descent of Pretoria's last investment-grade rating into "junk status".
S&P and Fitch, the other two global rating agencies that investors and markets use as guideposts, pulled their triggers in 2017 against the backdrop of mounting scandals under former president Jacob Zuma. Moody's has been a reluctant executioner but its patience is almost spent.
Moody's on Friday revised its South African outlook to "negative" while maintaining its Baa3 rating - the lowest category in the investment-grade stable - on the country's debt. This means a ratings downgrade to sub-investment levels is probable within the next 12 to 18 months unless South Africa gets its fiscal house in order. But such a move could come sooner, with the first big test the Budget that will be unveiled in February.
"Unless we see corrective action in the February Budget, we could be...