South Africa Achieves First Credit Upgrade in Nearly 20 Years
South Africa Achieves First Credit Upgrade in Nearly 20 Years
S&P Global raised the country’s foreign-currency long-term sovereign rating to BB from BB–. The decision reflects:
🟠improved fiscal health,
🟠stronger growth prospects,
🟠reduced contingent liabilities, driven by progress at state-owned power utility Eskom.
A recent midterm budget review confirmed that debt-to-GDP is stabilizing at 77.9% this fiscal year, while the budget deficit is projected to narrow to 4.7% of GDP in 2025/26, down from 4.8% in the initial forecast. State-owned enterprises in freight logistics and energy have also reportedly shown marked improvement.
S&P projects South Africa’s GDP growth will rise to 1.1% in 2025, following a modest 0.5% expansion in 2024, with an average of 1.5% expected through 2026–2028. This outlook is supported by a more reliable electricity supply and gradual recovery across key economic sectors.
S&P anticipates consecutive years of primary surpluses and continued fiscal consolidation through 2028. The agency has affirmed South Africa’s credit outlook at “positive.”
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