Rating downgrade could deter investors: economist
Updated | By Steve Bhengu
An economist feels a downgrade of the South African economy will not be the end of the world.
Officials from ratings agency Moody's will be in the country next week to assess the economy currently under downgrade review.
Should Moody's cut SA's rating, we'd be one notch above junk status.
A further downgrade to junk status would make it more expensive for South Africa to borrow money.
Economist Graeme Kerner's added it could potentially scare-off investment.
"Initially, it will hit the rand that will obviously pull inflation up. Inflation together with the downgrade will push interest rates up. So it will actually be fairly broad-based.
"A weaker rand for example with a steady oil price in dollar terms would mean higher petrol prices. So it will have quite a pronounced and profound effect on the average citizen," he said.
(File photo)
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