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Roundup: S. African gov't says able to pay debt following downgrade warning

Xinhua, March 15, 2016 Adjust font size:

South African Finance Minister Pravin Gordhan has said the government has the ability to pay its debt, days after rating agency Moody's put its credit status on review.

Gordhan was briefing the media on Monday in Johannesburg after concluding a visit to Britain and the U.S. with the aim of boosting investors' confidence.

The South African government's gross debt is put at around two trillion rand (about 130.7 billion U.S. dollars) -- around half of its Gross Domestic Product (GDP), according to a statement issued by the National Treasury at the media briefing.

During Gordhan's visit, investors underscored "the need for South Africa to implement the growth-inducing economic reforms with urgency," the statement said.

"The next few months are critical as South Africa is expected to demonstrate concrete actions to map a path for higher economic growth as it seeks to preserve its investment grade rating and also demonstrate progress to address poverty, unemployment and inequality," it added.

Gordhan said the government was working to taper the debt-to-GDP ration to less than 50 percent.

The government would spur on concrete economic growth for South Africa to win back credibility in the international market, he said.

"Regulatory clarity is increasingly key for South Africa," the minister said, expressing confidence of putting the country's sluggish economy "on a higher road to growth".

Moody's said last week it was reviewing whether to cut the South Africa's credit rating to one level above junk.

Gordhan has been trying to reassure financial markets that the government is serious about meeting its fiscal goals in order to avoid the downgrade.

Moody's is set to visit South Africa for the review from March 16 to 18.

It says its move was prompted by "the continuing rise in risks" to South Africa's medium-term economic prospects and to its fiscal strength.

"We need to provide very concrete evidence over the next few months that we're not just talking," Gordhan said in reference to Moody's' review. Endit