Credit rating agency Fitch on Friday upgraded South Africa’s long-term sovereign rating by one notch to BB from BB-, citing prudent fiscal management despite weak growth and economic shocks.Fitch said in a statement it saw South Africa’s debt-to-GDP levels well below those expected when it downgraded the country to BB- in 2020.In a separate statement, South Africa’s National Treasury said it was Fitch’s first upgrade in almost 21 years and that it was committed to sound public finances and implementing economic reforms.“South Africa still has some way to go to regain its investment-grade credit rating, but for the first time in more than a decade we are seeing a clear turnaround in the downward ratings trend,” Treasury director-general Duncan Pieterse said.Fitch said South Africa’s rating remained constrained by high inequality and a high interest-to-revenue ratio but that it was supported by a favourable government debt structure with long maturities and mostly local-currency denomination.It expects government debt to stabilise at about 80% of GDP over the next two years, supported by continued primary surpluses, stronger revenue collection and improved market sentiment.Fitch’s upgrade comes after Moody’s shifted its outlook on South Africa’s Ba2 rating last month to positive from stable.This week the National Treasury’s Pieterse said South Africa was on track to meet its fiscal targets despite the Iran war.Reuters
Fitch upgrades South Africa’s credit rating on lower debt projections
This after Moody’s recently affirmed the country’s rating and revised the outlook to positive
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