Ratings agencies see SA's medium- term growth rebounding above 1.5%

S&P expects SA's real GDP growth to rise 1.1% after a subdued 0.5% in 2024

- TAWANDA KAROMBO

S&P Global Ratings upgraded the country's foreign-currency sovereign rating to BB, citing a more positive outlook for the rand and improved reform momentum after Finance Minister Enoch Godongwana tabled the Medium-Term Budget Policy Statement last week.

(ARMAND Hough Independent Newspapers)

INTERNATIONAL ratings agencies expect South Africa's 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’s foreign-currency sovereign rating to BB, citing a more positive outlook for the rand and improved reform momentum.

Moody’s, which maintains a Ba2 stable rating on South Africa, echoed the more upbeat sentiment, saying the country’s debt burden is likely to stabilise “because of high growth” in nominal GDP.

S&P said over the weekend that it expects South Africa's real GDP growth to rise 1.1% this year after a subdued 0.5% in 2024 before averaging 1.5% over the period 2026-2028.

The agency said the recovery will be driven by ongoing reforms in electricity, logistics, and other network industries supporting growth.

However, S&P’s growth outlook for 2026 and 2027 of 1.2% in each year is more conservative than the National Treasury's 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 “weigh on potential revenue growth and have a denominator impact” on South Africa’s fiscal metrics.