LONDON — Wednesday budget should decide the fate of South Africa's solitary remaining investment grade credit rating, but with many in the country already resigned to its loss the bigger question might be how low could it go. The fiscal plan envisages trimming a swollen deficit via a mix of spending cuts, setting the scene for a showdown that could further hobble an already ailing economy. A cut to junk by Moody's - following downgrades by S&P and Fitch in 2017 - would see the country ejected from FTSE's World Government Bond Index (WGBI), triggering up to $11 billion (168 billion rand) of selling by foreign investors, analysts estimate. Moody's has already halved its 2020 growth forecast this month to 0.7% and the Treasury said on Wednesday its budget deficit is likely to reach 6.8% of GDP this fiscal year, the highest in 18 years.

Source: International New York Times February 26, 2020 17:03 UTC