Rating agency S&P Global has revised South Africa’s credit rating outlook to positive from stable. However, S&P maintained the country’s sovereign debt rating below investment grade or junk.
In statement released last night, the rating agency says its decision to upgrade the rating outlook reflects an improvement in the business environment.
It has also noted South Africa’s deep domestic capital markets that continue to provide strong buffers against shifts in external financing.
The rating agency expects South Africa to record a current account surplus for the third consecutive year – supported by higher commodity prices that have risen sharply since the start of the Russia-Ukraine conflict.
Government has welcomed the announcement. In a statement, National Treasury says it will use some of the additional revenue to reduce debt, support urgent social needs and promote job creation.
It maintains that faster implementation of economic reforms and fiscal consolidation will provide a stable foundation for growth.