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South African President Cyril Ramaphosa. [File]

Business News
Moody's cuts South Africa's 2020 GDP growth forecast after coronavirus

Ratings agency Moody’s has cut its 2020 growth forecast for South Africa to 0.4 per cent from 0.7 per cent, one of several countries it saw as having lower growth prospects in a new report because of the coronavirus outbreak.

“The global spread of the coronavirus is resulting in simultaneous supply and demand shocks,” Moody’s said in a global research report.

Moody’s is the last of the major international agencies to keep an investment grade rating on South Africa and is scheduled to review that assessment this month.

“We expect these shocks to materially slow economic activity, particularly in the first half of this year. We have, therefore revised our 2020 baseline growth forecasts for all G-20 economies,” it said in a statement.

SEE ALSO: 'Bat Woman' scientist warns about fresh pandemic caused by viruses evolving

South Africa on Thursday confirmed its first case of coronavirus in a citizen who had visited Italy.

Since the coronavirus outbreak began in the central Chinese city of Wuhan in December, it has infected almost 100,000 people worldwide and killed more than 3,000, most of them in China.

Meanwhile, South Africa’s net foreign reserves rose to Sh4.54 trillion ($45.358 billion) in February from Sh4.51 trillion ($45.147 billion) in January, Reserve Bank data showed on Friday.

Gross reserves also increased to Sh5.47 trillion ($54.710 billion) from Sh5.46 trillion ($54.613 billion) at the end of January.

The forward position, representing the central bank’s unsettled or swap transactions, increased to a balance of Sh64.2 billion ($642 million) in February after a positive balance of Sh 54.7 billion ($547) million previously. 

SEE ALSO: New ways to survive virus crisis

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