JOHANNESBURG - Ratings agency Moody’s has upgraded South Africa’s outlook from stable to positive, signalling easing debt pressures and improved fiscal performance.
The agency, however, kept the country’s sovereign debt rating unchanged at Ba2, still below investment grade.
Moody’s says the shift reflects a rising primary budget surplus, better revenue collection and expectations that government debt will gradually stabilise and decline.
Economists say the move is a boost for investor confidence as South Africa continues efforts to contain spending and support structural reforms.
However, risks remain, including weak long-term growth, high inequality and exposure to global shocks such as rising energy prices and geopolitical tensions.
Despite the improved outlook, Moody’s cautions that sustained fiscal discipline and stronger economic growth will be needed before any full credit rating upgrade is considered.