Moody’s says South Africa is on right track for rating upgrade

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.

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 – a gauge of how much revenue exceeds non-interest expenditure – amid higher income.

Wohlmann