S&P, Fitch Affirms South Africa's Credit Rating, Outlook

Standard & Poor's (S&P) and Fitch affirmed on Friday South Africa's sovereign ratings and outlooks, citing improved short-term economic performance and improved finances.

Public finances for South Africa were in disrepair before the outbreak of the pandemic and have worsened since then, with total debt expected to exceed 87% of GDP in 2024 from about 80% in 2021.

S&P's affirmed South Africa's long-term foreign exchange rating at BB-, and kept the country's domestic currency debt at BB, with a stable outlook.

Fitch Ratings also confirmed South Africa's long-term debt rating in foreign and domestic currencies to "BB-" from "BB" on Friday, with a negative outlook. Moody's has also classified South African debt as junk.

Fitch said public finances have improved significantly due to strong fiscal revenues, compared to the last review, yet, they are still poorly rated as the government's fiscal consolidation plan relies heavily on containing public wages.

After contracting by 7% in 2020, S&P expects economic growth in South Africa to rebound to 3.6% this year, before easing to 2.5% in 2022 and less than 2% in 2023. Fitch forecasts growth of 4.3% in 2021 and 2.5% in 2022.