S&P Global Ratings lifted South Africa\u2019s credit rating for the first time since 2005, citing the nation\u2019s improving growth and fiscal trajectory.<\/p>\n\n\n\n
The credit assessor upgraded the nation\u2019s rating by a notch to BB, just two notches into junk. S&P kept a positive outlook on the nation as there\u2019s potential for further improvement in fiscal metrics, according to a statement on Friday.<\/p>\n\n\n\n
The ratings company said the reduction of liabilities from state-owned Eskom Holdings was due to the utility\u2019s improved performance. The company has posted its first profit in eight years, making it less likely to require support from the government.<\/p>\n\n\n\n
\u201cThe government is on track to post its third annual primary surplus,\u201d S&P analysts Ravi Bhatia and Benjamin Young wrote. \u201cWhile contingent liabilities are likely to ease as state-owned electricity utility, Eskom, is being reformed.\u201d<\/p>\n\n\n\n
The move underscores South Africa\u2019s progress in demonstrating its commitment to fiscal consolidation, offering relief to a nation grappling with weak growth and high debt.<\/p>\n\n\n\n
Finance Minister Enoch Godongwana on Wednesday presented a medium-term budget showing stronger revenue collection and projecting that debt is still expected to peak at 77.9% of gross domestic product in the fiscal year ending March, compared with a 77.4% estimate previously.<\/p>\n\n\n\n
The slightly higher projection reflects the decision to formally adopt a 3% inflation target, giving political backing to the Reserve Bank\u2019s preference for anchoring prices at that level \u2014 announced at the end of July.<\/p>\n\n\n\n
Investor sentiment has strengthened since then, fueling a rally in South African assets. The yield on the country\u2019s 10-year benchmark bond has fallen 115 basis points to 8.65%, reflecting growing confidence in policy discipline.<\/p>\n\n\n\n
The budget also commits to finalizing a proposal for a fiscal anchor next year \u2014 a key step toward cementing South Africa\u2019s consolidation efforts. <\/p>\n\n\n\n
In the absence of a binding rule, the government has targeted a primary budget surplus, first achieved in 2023\u201324, and projected to widen over the rest of the decade, helping reduce debt-service costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
S&P Global Ratings lifted South Africa\u2019s credit rating for the first time since 2005, citing the nation\u2019s improving growth and fiscal trajectory.<\/p>\n","protected":false},"author":59,"featured_media":824532,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[17448,1164,24126,11449],"class_list":["post-843333","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-enoch-godongwana","tag-eskom","tag-ravi-bhatia","tag-sp-global-ratings"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843333","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=843333"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843333\/revisions"}],"predecessor-version":[{"id":843334,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/843333\/revisions\/843334"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/824532"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=843333"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=843333"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=843333"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}