{"id":265548,"date":"2025-11-16T09:40:20","date_gmt":"2025-11-16T10:40:20","guid":{"rendered":"https:\/\/www.premium-partners.net\/?p=265548"},"modified":"2025-11-17T06:05:33","modified_gmt":"2025-11-17T06:05:33","slug":"ratings-agencies-see-sas-medim-term-growth-rebounding-above-1-5-on-reform-momentum","status":"publish","type":"post","link":"https:\/\/www.premium-partners.net\/fr\/builder\/ratings-agencies-see-sas-medim-term-growth-rebounding-above-1-5-on-reform-momentum\/","title":{"rendered":"Ratings agencies see SA’s medim-term growth rebounding above 1.5% on reform momentum"},"content":{"rendered":"

This post<\/a> was originally published on this site<\/a><\/p>

<\/p>\n

Tawanda Karombo<\/p>\n

International ratings agencies expect South Africa\u2019s economic performance to strengthen steadily over the next few years, with projections showing GDP growth rebounding by more than 1.5% between 2026 and 2028.<\/p>\n

This comes as S&P Global Ratings upgraded the country\u2019s foreign-currency sovereign rating to BB, citing a more positive outlook for the rand and improved reform momentum.<\/p>\n

Moody\u2019s, which maintains a Ba2 stable rating on South Africa, echoed the more upbeat sentiment, saying the country\u2019s debt burden is likely to stabilise \u201cbecause of high growth\u201d in nominal GDP.<\/p>\n

S&P said over the weekend that it expects <\/span>South Africa\u2019s real GDP growth <\/span>to rise <\/span>1.1% <\/span>this year <\/span>after a subdued 0.5% in 2024<\/span> before averaging <\/span>1.5% over <\/span>the period <\/span>2026-2028<\/span>.<\/span><\/p>\n

The agency said the recovery will be driven by ongoing reforms in electricity, logistics, and other network industries<\/span> support<\/span>ing<\/span> growth.<\/span><\/p>\n

However, S&P\u2019s growth outlook for 2026 and 2027 of 1.2% in each year is more conservative than the National Treasury\u2019s forecasts of 1.5% and 1.8%.<\/p>\n

The ratings firm attributes this gap to weaker expectations for gross fixed-capital formation, which it says will \u201c<\/span>weigh on potential revenue growth and have a denominator impact<\/span>\u201d<\/span> on <\/span>South Africa\u2019s <\/span>fiscal metrics.<\/span><\/p>\n

On Friday, <\/span>S&P raised its foreign currency long-term sovereign credit rating on South Africa for the first time in 17 years to BB from BB- and its local currency long-term sovereign credit rating to BB+ from ‘BB, supported by a positive outlook.<\/span><\/p>\n

\u201c<\/span>The positive outlook reflects the potential for further improvements in fiscal metrics and government debt stabilization if the coalition government continues its fiscal consolidation,\u201d noted S&P.<\/span><\/p>\n

\u201cThe outlook also reflects the possibility of stronger growth than we currently expect, despite trade- and tariff-related headwinds, if the authorities accelerate economic reforms while addressing infrastructure pressures.<\/span>\u201d<\/span><\/p>\n

It noted that \u201cb<\/span>road reform momentum has picked up pace<\/span>\u201d after the government launched the se<\/span>cond phase of Operation Vulindlela<\/span> <\/span>which focuses on reforms in electricity, local government, digital transformation, visa regimes, spatial inequality, water, and logistics.<\/span><\/p>\n

Momentum Investments\u2019 chief economist, Sanisha Packirisamy, said S&P’s upgrade was motivated by the fat that South Africa’s growth fundamentals are becoming more stable, particularly the improvement driven by structural reforms most visibly in electricity.<\/span><\/p>\n

“With improved financial performance and a significantly improved energy supply environment, Eskom is expected to require less support from the government. This has reduced contingent liabilities, which were a long-standing ratings constraint,” Packirisamy said.<\/span><\/p>\n

“But S&P is also candid about our biggest economic constraint, real GDP per capita growth. And so while momentum is improving, South Africa still has considerable ground to make up.” <\/p>\n

Moreover, r<\/span>eforms of the State-owned rail and port utility, Transnet, are also ongoing, with 11 private sector operators having been short-listed to assist in the running of rail routes. <\/span><\/p>\n

However, <\/span>Transnet \u201c<\/span>continues to post losses and continues to require some support<\/span>\u201d<\/span> as well as government guarantees.<\/span><\/p>\n

Meanwhile, the National Treasury and the South African Reserve Bank have agreed to lower the inflation target to 3%, a move Fitch Ratings says will strengthen macroeconomic stability and better align South Africa with its global trading partners. <\/span><\/p>\n

However, Fitch warned that lower inflation will also reduce nominal GDP and revenue growth, potentially limiting fiscal gains.<\/span><\/p>\n

\u201c<\/span>We believe the inflation target change will enhance macroeconomic stability, aligning South Africa\u2019s inflation more closely with that of its trading partners and alleviating structural downward pressures on the currency<\/span>,\u201d said Fitch on Friday.<\/span><\/p>\n

Despite the progress, S&P cautioned that South Africa\u2019s ratings remain constrained by low per-capita income, weak growth, sizeable deficits and high public-debt levels. <\/span><\/p>\n

Nonetheless, it acknowledged that the Government of National Unity has injected reformist energy into policy direction, with commitments to faster growth, improved service delivery and business-friendly reforms.<\/span><\/p>\n

S&P has <\/span>forecast <\/span>South Africa\u2019s<\/span> government deficit <\/span>to be s<\/span>lightly higher at 4.7% of GDP in 2025 and average 3.5% of GDP in 2026-2028, while the change in general government debt will average 4.1% of GDP over 2025-2028.<\/span><\/p>\n

It, however, believes that South Africa is <\/span>committed to achieving primary surpluses and fiscal consolidation.<\/span><\/p>\n

North West University’s Business School economist, Prof Raymond Parsons, said the S&P decision has now opened the way for SA to eventually extricate itself from its current junk status, but there remains a long way to go.<\/span><\/p>\n

“To regain full global investment status still requires that SA\u2019s economic steersmanship stays firmly on track over the next few years. Weaker growth would jeopardise the planned fiscal trajectory,” Parsons said. <\/span><\/p>\n

“Successful implementation of growth-friendly policies therefore remains the key – by ensuring that reform commitments will continue to be translated into tangible outcomes in confidence, stability, investment, jobs and service delivery.” <\/span><\/p>\n

BUSINESS REPORT<\/strong><\/p>","protected":false},"excerpt":{"rendered":"

Tawanda KaromboInternational ratings agencies expect South Africa\u2019s economic performance to strengthen steadily over the next few years, with projections showing GDP growth rebounding by more than 1.5% between 2026 and 2028.This comes as S&P Global Ratings upgraded the country\u2019s foreign-currency sovereign rating to BB, citing a more positive outlook for the rand and improved reform momentum.Moody\u2019s, which maintains a Ba2 stable rating on South Africa, echoed the more upbeat sentiment, saying the country\u2019s debt burden is likely to stabilise \u201cbecause of high growth\u201d in nominal GDP.S&P said over the weekend that it expects\u00a0South Africa\u2019s real GDP growth\u00a0to rise\u00a01.1%\u00a0this year\u00a0after a subdued 0.5% in 2024\u00a0before averaging\u00a01.5% over\u00a0the period\u00a02026-2028.The agency said the recovery will be driven by ongoing reforms in electricity, logistics, and other network industries\u00a0supporting growth.However, S&P\u2019s growth outlook for 2026 and 2027 of 1.2% in each year is more conservative than the National Treasury\u2019s forecasts of 1.5% and 1.8%.The ratings firm attributes this gap to weaker expectations for gross fixed-capital formation, which it says will \u201cweigh on potential revenue growth and have a denominator impact\u201d\u00a0on\u00a0South Africa\u2019s\u00a0fiscal metrics.On Friday,\u00a0S&P raised its foreign currency long-term sovereign credit rating on South Africa for the first time in 17 years to BB from BB- and its local currency long-term sovereign credit rating to BB+ from ‘BB, supported by a positive outlook.\u201cThe positive outlook reflects the potential for further improvements in fiscal metrics and government debt stabilization if the coalition government continues its fiscal consolidation,\u201d noted S&P.\u201cThe outlook also reflects the possibility of stronger growth than we currently expect, despite trade- and tariff-related headwinds, if the authorities accelerate economic reforms while addressing infrastructure pressures.\u201dIt noted that \u201cbroad reform momentum has picked up pace\u201d after the government launched the second phase of Operation Vulindlela\u00a0which focuses on reforms in electricity, local government, digital transformation, visa regimes, spatial inequality, water, and logistics.Momentum Investments\u2019 chief economist, Sanisha Packirisamy, said S&P’s upgrade was motivated by the fat that South Africa’s growth fundamentals are becoming more stable, particularly the improvement driven by structural reforms most visibly in electricity.”With improved financial performance and a significantly improved energy supply environment, Eskom is expected to require less support from the government. This has reduced contingent liabilities, which were a long-standing ratings constraint,” Packirisamy said.”But S&P is also candid about our biggest economic constraint, real GDP per capita growth. And so while momentum is improving, South Africa still has considerable ground to make up.”\u00a0Moreover, reforms of the State-owned rail and port utility, Transnet, are also ongoing, with 11 private sector operators having been short-listed to assist in the running of rail routes. However, Transnet \u201ccontinues to post losses and continues to require some support\u201d\u00a0as well as government guarantees.Meanwhile, the National Treasury and the South African Reserve Bank have agreed to lower the inflation target to 3%, a move Fitch Ratings says will strengthen macroeconomic stability and better align South Africa with its global trading partners. However, Fitch warned that lower inflation will also reduce nominal GDP and revenue growth, potentially limiting fiscal gains.\u201cWe believe the inflation target change will enhance macroeconomic stability, aligning South Africa\u2019s inflation more closely with that of its trading partners and alleviating structural downward pressures on the currency,\u201d said Fitch on Friday.Despite the progress, S&P cautioned that South Africa\u2019s ratings remain constrained by low per-capita income, weak growth, sizeable deficits and high public-debt levels. Nonetheless, it acknowledged that the Government of National Unity has injected reformist energy into policy direction, with commitments to faster growth, improved service delivery and business-friendly reforms.S&P has\u00a0forecast\u00a0South Africa\u2019s\u00a0government deficit\u00a0to be slightly higher at 4.7% of GDP in 2025 and average 3.5% of GDP in 2026-2028, while the change in general government debt will average 4.1% of GDP over 2025-2028.It, however, believes that South Africa is committed to achieving primary surpluses and fiscal consolidation.North West University’s Business School economist, Prof Raymond Parsons, said the S&P decision has now opened the way for SA to eventually extricate itself from its current junk status, but there remains a long way to go.”To regain full global investment status still requires that SA\u2019s economic steersmanship stays firmly on track over the next few years. Weaker growth would jeopardise the planned fiscal trajectory,” Parsons said. “Successful implementation of growth-friendly policies therefore remains the key – by ensuring that reform commitments will continue to be translated into tangible outcomes in confidence, stability, investment, jobs and service delivery.”\u00a0BUSINESS REPORT<\/p>","protected":false},"author":1,"featured_media":265411,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-265548","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-builder"],"_links":{"self":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/265548","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/comments?post=265548"}],"version-history":[{"count":2,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/265548\/revisions"}],"predecessor-version":[{"id":265550,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/posts\/265548\/revisions\/265550"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media\/265411"}],"wp:attachment":[{"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/media?parent=265548"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/categories?post=265548"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.premium-partners.net\/fr\/wp-json\/wp\/v2\/tags?post=265548"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}