February 17, 2020 / 1:37 PM / in 3 months

Moody's cuts South Africa's 2020 GDP growth forecast to 0.7%

A Moody's sign on the 7 World Trade Center tower, file. REUTERS/Mike Segar

JOHANNESBURG (Reuters) - Ratings agency Moody’s has cut its 2020 growth forecast for South Africa to 0.7% from a September forecast of 1.5%, saying the economy remains stuck in low gear due to lacklustre domestic private-sector demand.

Moody’s also attributed the revised forecast to “the detrimental impact of widespread power outages on the manufacturing and mining activity,” it said in a research report.

The ratings agency left South Africa on the brink of “junk” status in November last year after it revised the outlook on the country’s last investment-grade credit rating to “negative,” piling pressure on President Cyril Ramaphosa to quicken the pace of reform.

Moody’s is the last of the major international agencies to keep an investment grade rating on the sovereign and is scheduled to review that assessment in March.

Reporting by Nqobile Dludla; editing Olivia Kumwenda-Mtambo

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