New South African finance minister: Budget may not stave off downgrades

CAPE TOWN (Reuters) – South Africa’s incoming Finance Minister Nhlanhla Nene said on Tuesday that the budget tabled by his predecessor last week might not prevent further credit ratings downgrades, casting doubt on hopes it would help reduce a large national debt pile.

The shoddy state of the government finances forced the Treasury last week to take the politically risky step of raising value-added tax.

The move was welcomed by ratings agencies and markets subsequently priced in expectations that it would enable South Africa to hang on to its last investment grade rating in a Moody’s review due soon.

Nene, who served as finance minister from May 2014 until December 2015 before being sacked by Zuma, was asked during a radio interview whether the budget would stave off further…

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