Moody's Says South Africa Is on the Right Track for Its First Ratings Upgrade Since 2009
South Africa is heading in the right direction for its first credit-rating upgrade by Moody's Ratings since 2009, provided the country's fiscal performance continues to improve, Bloomberg reported via Moneyweb on October 14. The agency, which rates South Africa Ba2 — two notches below investment grade — revised South Africa's credit outlook to positive from stable in May. It says the country has reached an inflection point after stabilising its debt and delivering pro-growth economic reforms. "We could upgrade South Africa's rating if fiscal performance continues to improve," Evan Wohlmann, a vice president at Moody's, told a virtual media briefing on Tuesday. The assessment would hinge on confidence in how the credit profile will evolve, he said.
Finance Minister Enoch Godongwana delivers his mid-term budget review on October 21 and is expected to show continued growth in the country's primary budget surplus amid higher income. Wohlmann said the baseline forecast was for debt that peaked in the last fiscal year at 87% of gross domestic product to gradually decline to 84% of GDP by the end of the decade, supported by an uptick in economic output.
Africa's largest economy has expanded by less than 1% on average over the past decade, but structural reforms are beginning to deliver, with Nedbank Group predicting growth will edge up to 1.9% in the next two years, with 2.5% possible by 2030. Moody's track record shows it upgrades about 60% of the sovereign credits it assigns a positive outlook. Still, restoring South Africa's investment-grade rating may take some time. Moody's also said it sees the risk of a policy reversal from the forthcoming electoral cycle as limited; the country holds municipal elections on November 4.
Source: GSM · USA (original Chinese edition)
Photo: 约翰内斯堡天际线。图片来源：Wikimedia Commons，Mark Hillary 摄，CC BY 2.0 授权
