Fitch has 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. The agency noted that South Africa's debt-to-GDP levels are well below those expected when the rating was downgraded in 2020. The National Treasury hailed it as Fitch's first upgrade in almost 21 years and reaffirmed commitment to sound public finances and economic reforms. While acknowledging constraints from high inequality and a high interest-to-revenue ratio, Fitch pointed to a favorable government debt structure and expects debt to stabilize at about 80% of GDP over the next two years.
This after Moody’s recently affirmed the country’s rating and revised the outlook to positiveShare current article via Twitter Fitch has upgraded South Africa 's credit rating . Picture: SUPPLIED 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.
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