Economy A message to you, Moody’s
So like Standard and Poor’s and Fitch before them, Moody’s have after much pencil sucking and rueful scribbling on small bits of paper gone and downgraded our investment status to junk, predictably, of course, but it couldn’t have come at a worse time. The rand promptly fled south, and is now running at around 18 to the dollar. This rand weakness, says our friend Adrian Saville of Cannon Asset Managers, is likely to work its way into inflation, which should start ticking up in a couple of months. What next? Provided we implement the policies now in place to reduce unemployment, root out corruption, realign the budget from current to capital spending, fix the SOEs and reduce inequality, we’ll be good to go. But that is going to take a long while, particularly as it seems “plausible” that GDP could shrink by as much as 2% or even 3% this year.
Comment: This is not a time for sunny platitudes about the only way being up. But reality can shine a light on character, and we know we have that.