Fitch Ratings is the third agency this year to have upgraded South Africa’s long-term foreign and local currency Issuer Default Ratings to a ‘BB’ up from ‘BB-’.
This is the country’s first upgrade by Fitch in over two decades.
The agency said the upgrade is due to consistent primary fiscal surpluses, consolidation, disciplined expenditure and improved debt stabilisation.
These kept debt-to-GDP ratio well below levels anticipated during earlier downgrades.
Moody’s also upgraded South Africa’s rating from stable, to positive outlook, in May.
The rating agency’s Evan Wohlmann, said “we expect a rising primary surplus and gradually improving debt-service costs to stabilise the general government debt burden in the near term. The better fiscal outlook for South Africa is still at an early stage but continued improvements could support a shift to a clear downward trajectory in debt and debt-service costs. We expect stronger investment, supported by ongoing reforms, to gradually raise real GDP growth to around 2% by 2028 and underpin fiscal improvements.”
S&P scored the same for South Africa’s long-term foreign currency sovereign credit rating – ‘BB’ and local currency rating at ‘BB+’.
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