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S&P, Fitch affirms South Africa’s sovereign rating

Credit rating agencies S&P Global Ratings and Fitch affirmed South Africa’s sovereign rating and outlook on Friday, citing an upturn in near-term economic performance and improved public finances.

The public finances of Africa’s most industrialised nation were in bad shape before the COVID-19 pandemic struck last year and have worsened since, with gross debt predicted to exceed 87% of GDP in 2024 from roughly 80% now.

But in the 2021 budget presented in February, the National Treasury took steps to try to avoid a debt spiral, including by continuing with efforts to contain the public sector wage bill.

On Friday S&P affirmed South Africa’s long-term foreign-currency rating of BB-, or three notches below the investment grade. It kept the country’s local currency debt at BB, both with a stable outlook.

Fitch also affirmed South Africa’s long term foreign and local currency debt ratings to ‘BB-’ from ‘BB’, on Friday with a negative outlook.

Moody’s also rank South Africa’s debt junk.

Source: Further Africa

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