Africa-Press – South-Africa. Fitch has raised South Africa’s credit rating from BB- to BB, maintaining a stable outlook, marking the first upgrade by the agency for the country in nearly 21 years, a rare positive signal for the South African economy.
The agency stated that its decision is based on a record of prudent financial management and progress in fiscal consolidation, despite ongoing weak economic growth and external shocks. According to the agency, public debt is expected to stabilize over the next two years at around 80% of GDP, a level that remains high compared to the average for countries rated at BB.
Fitch projected that the consolidated primary surplus in the budget will widen to 1.7% of GDP in the fiscal year 2027, compared to estimates of about 1.2% in the fiscal year 2025, which could reduce the consolidated fiscal deficit to around 3.8% in 2027.
This decision comes days after South Africa announced a primary budget surplus for the third consecutive year, reaching 1.1% of GDP in the year ending in March, exceeding the National Treasury’s expectations of 0.9%, which enhances the government’s image among investors, particularly as it seeks to lower borrowing costs and improve market confidence.
The National Treasury of South Africa welcomed Fitch’s decision, considering that the credit rating upgrade contributes to reducing borrowing costs for the government, businesses, and households, and enhances the economy’s ability to attract investments. It also noted that South Africa has become the second country in the G20 to have its rating upgraded by Fitch this year.
