S&P Global Ratings has raised South Africa’s credit rating for the first time since 2005, citing improvements in the country’s economic growth and fiscal trajectory.
The upgrade moves the nation’s rating up by one notch to BB, placing it just two notches into “junk” status.
The agency maintained a positive outlook, highlighting the potential for further improvement in South Africa’s fiscal metrics, according to a statement released on Friday.
Independent economic analyst Prof Bonke Dumisa called the upgrade encouraging.
“It is really positive to see South Africa’s foreign currency long-term sovereign rating move from BB-minus to BB,” he said.
However, Dumisa cautioned that the benefits will be gradual.
“We will feel the impact of this, but bit by bit, it won’t be immediate. It’s much easier to destroy than to build. Take unemployment, for example. Even if inflation and some metrics improve, unemployment is a structural issue. Reducing it will require sustained effort across many areas.”
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