Nov 14 (Reuters) – South Africa on Friday secured its first credit rating upgrade in nearly 20 years after S&P Global raised the country\u2019s foreign-currency long-term sovereign rating to “BB” from “BB-“, citing stronger growth prospects, an improving fiscal outlook and reduced contingent liabilities following better performance at state power utility Eskom.<\/p>\n
The National Treasury has worked to arrest rising debt and restore fiscal credibility to put the country back on a growth path.<\/p>\n
Sign up here.<\/a><\/p>\n A recent mid-term budget review showed debt to GDP stabilising at 77.9% this financial year and the budget deficit narrowing to 4.7% of GDP in 2025\/26 from 4.8% in the May budget.<\/p>\n State-owned entities in freight logistics and power have also shown improvement as the country’s reform agenda gains momentum.<\/p>\n S&P said in a statement it expects South Africa’s GDP growth to pick up to 1.1% in 2025 after a subdued 0.5% in 2024 and to average 1.5% through 2026-2028 as electricity and other sectors support growth.<\/p>\n Fiscal revenue has beaten budget targets early in fiscal 2025, and the agency sees successive years of primary surpluses and continued fiscal consolidation through 2028.<\/p>\n South Africa is now two notches below investment grade on the foreign currency rating.<\/p>\n Africa’s most industrialised economy was first downgraded to junk status in 2017, following the firing of well-respected finance minister Pravin Gordhan by then President Jacob Zuma and the policy instability that ensued.<\/p>\n S&P affirmed the country’s outlook at “positive”.<\/p>\n Reporting by Aatrayee Chatterjee in Bengaluru and Kopano Gumbi; Editing by Tasim Zahid<\/p>\n Our Standards: The Thomson Reuters Trust Principles., opens new tab<\/a><\/p>\n