The economic news out of South Africa is unremittingly bad: 25% unemployment, less than 1% expected GDP growth for 2016, public debt as a percentage of GDP nearing 50%, a 10% drop in the rand’s value since December, etc.. The current South African Finance Minister, Pravin Gordhan, has gone so far as to describe his country as being in a “crisis”. However, “Moody’s Investor Service said on Wednesday Finance Minister Pravin Gordhan’s planned tax increases in his 2016 Budget Speech were well targeted, given the weak economic backdrop”. Clearly, Moody’s is not jumping for joy about the situation in South Africa: “South Africa’s budget aims to quickly consolidate spending by cutting a large public sector wage bill, but has not identified specific revenue measures to achieve smaller deficits, Moody’s said on Wednesday”, and it seems very hard to avoid the conclusion that Moody’s will downgrade South Africa at least one level. But a 4 level drop doesn’t seem to be in the cards, as far as I can see. 1% probability at best.