Govt welcomes S&P credit rating improvement
The agency expects South Africa to post a current account surplus for the third consecutive year due the rise in prices for key metals and mining exports.
Government has welcomed S&P’s decision to revise South Africa’s credit rating outlook to positive from stable, while affirming the long term foreign and local currency debt ratings at ‘BB-’ and ‘BB’, respectively.
According to S&P, recent favourable terms of trade in South Africa have improved the external and fiscal trajectory, while the country's reasonably large net external asset position, flexible currency and deep domestic capital markets provide strong buffers against shifts in external financing.
In addition, the agency expects South Africa to post a current account surplus in 2022 for the third consecutive year, as prices for key metals and mining exports have risen significantly since the start of the Russia-Ukraine conflict.
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In a statement, Treasury says S&P also noted some improvement in the implementation of key reform targets under Operation Vulindlela, established to accelerate the implementation of structural reforms, as well as higher-than-expected tax revenue.
"Faster implementation of economic reforms, accompanied by fiscal consolidation to provide a stable foundation for growth, will support a faster recovery and higher levels of economic growth over the long term."
