Moody’s cuts SA's growth forecast

JOHANNESBURG - Ratings agency Moody’s has cut its growth forecast for South Africa.

It estimates this year's growth will be between 0.7 and 1 percent.

Moody's said the slide into recession in the second quarter would exacerbate fiscal and monetary challenges.

It said weaker-than-expected economic data was "credit negative".

READ: Merrill Lynch revises SA growth forecast

The rand has slumped as much as 5 percent against the dollar this week and government bonds have sold off steeply, also hurt by the turmoil on Turkish and Argentinian financial markets.

"This weaker-than-expected economic performance will exacerbate fiscal and monetary challenges, a credit negative," Moody's said in a statement on the weaker GDP figures.

The agency is the last of the "big three" international agencies to rate South Africa's long-term foreign-currency debt investment grade.

Several foreign banks have slashed their growth forecasts for South Africa to less than 1 percent this year.