Ratings agency Moody’s has joined other financial analysts in cutting South Africa’s growth outlook for 2020 to below 1%, sending the rand back above R15 to the dollar.

The rand declined as much as 0.7% to trade above R15 per dollar for the first time in a week, Bloomberg reported.

Citing an economic slow-down based in low demand, widespread power outages, and the subsequent impact on key industries like mining and manufacturing, the group now sees South Africa’s 2020 GDP growth levels at just 0.7%.

Moody’s  is scheduled to review South Africa’s Baa3 credit rating in March. A downgrade by Moody’s would see South Africa lose its place in investment-grade indexes, sparking outflows from its bond and stock markets, Bloomberg said.

“Slow growth of economic activity is hampering the rate of jobs creation,” Moody’s said. “Our sub-1% projections reflect our view that the pace of economic activity will remain subdued, well below the country’s potential, over our forecast horizon.”

Various financial groups and industry analysts have pulled the country’s growth prospects below 1%, with the most optimistic being the Reserve Bank, which still sees growth at 1% for the year.

Projections range between 0.5% and 1%.

The International Monetary Fund (IMF) recently cut its GDP growth prospects for 2020 to 0.8%, while the World Bank cut its outlook to 0.9% at the start of January.

Moody’s is the last of the big ratings agencies to hold South Africa’s credit rating above sub-investment grade, commonly referred to as ‘junk’.

Late in 2019, the agency put the writing on the wall be shifting South Africa’s rating status from one level above junk with a stable outlook, to the same level with a negative outlook, signalling that, without the needed reforms, a downgrade to full junk status is the next move.

For many analysts and economists, the downgrade to junk is more a case of “when” rather than “if”, with some predicting a downgrade as early as March – following the 2020 Budget Speech – and others believing Moody’s reprieve will continue until the end of the year.

A downgrade to junk status has largely been factored into the local markets, but the announcement by Moody’s on Monday sent the rand back over R15 to the dollar.

The rand started the at R14.88 to the dollar; by 17h00, following the Moody’s announcement, it weakened to R15.01.

Read: An alternative to prescribed assets to boost growth and job creation opportunities in South Africa