Moody’s could upgrade South Africa’s credit rating within a year
By the AFREEQUE newsroom, based on Businessday
Moody’s says South Africa’s medium-term budget statement supports the country’s credit quality through progress on fiscal consolidation, and a rating upgrade could come within a year. The agency is due to review the rating on 27 November, while S&P will also publish its assessment that day, Business Day reports.
Moody’s estimates that South Africa’s credit rating could be upgraded in about a year, after judging the medium-term budget presented by Finance Minister Enoch Godongwana last week to be credit-positive. The agency welcomed progress on fiscal consolidation, Business Day reports.
Moody’s next review is scheduled for 27 November, at the same time as S&P Global’s. Fitch is due to publish its assessment on 11 December. Moody’s raised the outlook on South Africa’s rating from stable to positive in May. Bank of America considers the agency the most likely to upgrade the rating, potentially to Ba1, while an upgrade by S&P to BB+ appears less certain.
Moody’s noted that higher-than-expected revenue enabled the government to lower its consolidated deficit target for the 2026-2027 financial year to 3.9% of GDP, from 4% in the February budget. This is the second consecutive medium-term budget without an upward revision to the deficit, which could support debt reduction if this discipline is maintained.
The Finance Minister said that debt had stabilised at 78.4% of GDP in 2025-2026 and that the government intended to reduce it over the decade. Moody’s also estimates that the Fiscal Anchor Bill, presented with the medium-term budget, could help maintain prudent policy during the 2027 to 2029 electoral cycle. The agency had already welcomed the target of reducing the deficit to 3.9% of GDP (Moody’s assessment).
