Moody’s Flags Downgrade Risk on BMW Retreat: South Africa Credit
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A year after Moody’s Investors Service cut South Africa’s creditworthiness for the first time since the end of apartheid, the ratings company highlighted the risk of another downgrade as labor unrest dents growth.
Bayerische Motoren Werke AG’s decision earlier this month to halt expansion in Africa’s biggest economy following a three-week strike is evidence that labor strife is undermining growth, and other companies may follow, Moody’s said in a report on Oct. 12. Moody’s last downgrade came a month before Finance Minister Pravin Gordhan’s 2012 mid-term budget and was followed by rating cuts by Standard & Poor’s and Fitch Ratings. Gordhan will update his growth and fiscal projections on Oct. 23.