South Africa's Sovereign Credit Outlook Raised to Positive by Moody's

South Africa Moody's credit outlook primary surplus fiscal reforms

Moody's changed South Africa's sovereign outlook from stable to positive on Friday while affirming its Ba2 long‑term rating in both foreign‑currency and local‑currency issues. The agency said the upgrade reflects a gradually strengthening fiscal performance, a larger‑than‑expected primary budget surplus – around 1 % of GDP in the 2025/26 fiscal year – and improving debt‑service costs, which should stabilise the government's debt burden. "We expect a rising primary surplus and gradually improving debt‑service costs to stabilise the general government debt burden in the near term," Moody's noted.

Moody's forecasts real GDP growth of about 2 % by 2028, supported by reforms in electricity, rail, logistics and higher investment. It warned that external risks such as rising oil prices linked to Middle East tensions and still‑weak growth could threaten the recovery. The South African Treasury welcomed the move, with Director General Duncan Pieterse stating, "The latest decision by Moody’s is further confirmation of South Africa’s improving fiscal credibility due to a turnaround in the sustainability of public finance."

Sources

Moody's Changes South Africa's Outlook To Positive [dmarketforces.com]

2 months ago

Moody’s says South Africa’s finances are improving, but oil shocks and weak growth still threaten recovery [africa.businessinsider.com]

2 months ago

Big win for South African economy as Moody’s upgrades outlook [www.thesouthafrican.com]

2 months ago