Given the further deterioration in the medium-term budget policy statement outlook, Hendrickse believes the odds of South Africa reaching an unsustainably high level of public debt have increased. "We therefore share Moody's concerns expressed in their latest credit assessment. Moody's have in fact been behind the curve in taking a more negative stance on the progressive deterioration of South Africa's public finances. It has been two years since S&P became the second rating agency to rate South Africa as sub-investment grade. South Africa is in a difficult position, needing both higher growth and fiscal austerity to reverse course in favour of improvement. Given that the two are mutually exclusive, and require politically unpopular decisions, combined with our fiscal track record in recent years, a Moody's downgrade is our base-case expectation."