Reactions to the downgrade According to Prof Raymond Parsons, an economist at the NWU School of Business and Governance, Moody's latest decision regarding the country's investment rating should be seen as a warning. "As expected Moody's have reduced SA's investment rating by one notch - keeping it at investment grade, but just above junk status and retaining a 'negative outlook'." Parsons highlighted that a positive of the downgrade is that the country is still in the global bond index, which impacts on borrowing costs for South Africa. "This grants SA a breathing space and gives scope for remedial policies and actions. Yet the continued negative outlook categorization and Moody's critical but balanced narrative means that their decision should not be viewed as a reprieve, but rather as a warning for SA to get its house in order. Moody's sees the risks to growth and fiscal strength associated with the political outlook as now being tilted to the downside," clarified Parsons.