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Nuclear will plunge SA into ‘junk status’ - economist

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Johannesburg – One decision that will push the rating agencies to downgrade South Africa to “junk status” is the approval of the nuclear procurement programme, according to emerging markets economist Peter Montalto of Nomura.

South Africa is currently placed one notch above junk status, officially known as non-investment grade. The next step down is of huge concern to economists, wary of the resultant increase in inflation and interest rates as well as lower growth and, ultimately, job losses.

“Taking on the nuclear build programme contingent liabilities under the Department of Energy (Doe) and the ANCs preferred vendor financing model would confirm South Africa in junk for all the agencies,” Montalto told Fin24 on Thursday.

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