Police fired rubber bullets to disperse striking workers at Eskom’s Medupi power station yesterday as Moody’s warned the tooldown could tip the country’s credit rating into junk status.
The warning came as talks got under way to try to end the deadlock that has seen more than 220 000 metal and engineering workers, led by South Africa’s biggest union, the National Union of Metalworkers of SA (Numsa), on strike since Tuesday.
Bloomberg reports Moody’s warned that strikes threaten economic growth and the government’s ability to rein in debt.
“Continued weak investment, exports and overall growth will pose serious challenges to the government’s efforts to rein in its budget deficit and stabilise its debt metrics, a credit negative for the economically troubled country,” said Moody’s.
EU growth
Moody’s has had a negative outlook on South Africa’s Baa1 credit rating since November 2011. That’s two levels above Standard & Poor’s, which downgraded the nation’s debt on June 13 to BBB-, a notch above junk status.
The strikes are making it difficult for South Africa to take advantage of a recovery in growth in its main trading partners, such as Europe, Moody’s said…
South Africa Today – South Africa News
