The South African government faces a continued deterioration in fiscal strength, structurally very weak growth and a debt burden that is set to rise even faster and to higher levels than we had previously expected.  The unprecedented deterioration in the global economic outlook caused by the rapid spread of the coronavirus outbreak will further exacerbate South Africa’s challenges.

Corporate defaults are likely to climb as the coronavirus outbreak continues and oil prices remain low. Under a scenario of a sharp-but-short economic downturn, we project the trailing 12-month global speculative-grade default rate will climb to 6.8% in one year. In the event of a recession similar to the global financial crisis, our scenario analysis projects a default rate of 16.1%.

The economic and trade disruption caused by the coronavirus outbreak is spreading from the APAC region to the rest of the world.  View Moody's latest analysis on our specially created topic page. 

The Internal Revenue Service (IRS) extended the deadline for filing federal income taxes and tax payments by three months, and many if not all states that levy personal income taxes will follow suit. States will therefore receive a large portion of their income tax revenue in July rather than April, which will force them to make adjustments to bridge budget gaps, but most have considerable financial flexibility to blunt the credit-negative effects of the delays.