Economists at Bank of America, BNP Paribas, Morgan Stanley and Old Mutual expect South Africa to get a credit rating upgrade before the end of 2026.
The forecasts come from a Bloomberg survey published by Moneyweb and BusinessTech on 20 October. Four of the 11 economists in the survey expect an upgrade by year end. The other seven expect one in 2027.
The survey came ahead of the Medium-Term Budget Policy Statement, which Finance Minister Enoch Godongwana tables in Cape Town on Wednesday, 21 October. The economists linked their hopes to a projection that government debt will fall as a share of GDP. That would be the first such fall in more than two decades.
“We view Moody’s as the most likely agency to act,” said Tatonga Rusike, Bank of America’s sub-Saharan Africa economist.
Rusike said a move to Ba1 at Moody’s was possible. He said an S&P upgrade to BB+ was a closer call. He added that Fitch, which upgraded South Africa in June, was in no hurry to move again.
Bank of America expects South Africa to regain investment grade before 2029. A move to Ba1 at Moody’s or BB+ at S&P would still leave the country one notch below investment grade.
Morgan Stanley was the only bank in the reports to name a month. It expects S&P to raise South Africa to BB+ in November. It expects Moody’s to follow in early 2027. The reports did not say which agency or month BNP Paribas has in mind.
Old Mutual’s head of economic research, Keabetswe Mojapelo, was more upbeat. “We are in a position where we have our public finances in order,” she said.
Rusike was more careful. He said the agencies would need to see lasting progress, including lower deficits, falling debt and firmer growth. Investec Wealth & Investment International put the chance of South Africa regaining investment grade within two years at more than 50%.
Economists in the survey expect debt to reach 77.5% of GDP this financial year. National Treasury had projected 77.3%. The survey puts the 2026-27 budget deficit at 3.8% of GDP, better than the Treasury’s own forecast of 4%.
In May, Moody’s kept South Africa at Ba2 but changed its outlook from stable to positive, SAnews reported. National Treasury said this made South Africa the only G20 country on a positive outlook from Moody’s. It was the agency’s first positive outlook on the country since 2007. S&P also has South Africa on a positive outlook, according to the Bloomberg reports.
On 14 October, Business Day reported that Moody’s sees more room for a better rating than for a downgrade. The agency said it would treat the medium-term statement and next year’s budget as a test of whether debt keeps falling.
Moody’s said it would look at spending trends, tax collection and the support that commodity prices give to revenue. It also wants an updated fiscal plan that can hold spending down through an election cycle.
A higher rating usually lowers the extra return investors demand on government bonds. Banks, state-owned companies and listed firms that borrow in rand use those bond rates as a guide.
None of the three agencies has announced a change. Moody’s and S&P are both set to review South Africa on 27 November, and Fitch will review the country on 11 December.
Source: this article is based on reporting by businessnewssouthafrica.co.za. Image: businessnewssouthafrica.co.za. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.