JOHANNESBURG, May 23 – South Africa received a boost to investor sentiment after Moody’s Ratings revised the country’s outlook to positive from stable, citing improving fiscal performance and continued progress on structural reforms.
The ratings agency maintained South Africa’s long-term foreign and local currency issuer ratings at Ba2, which remains two notches below investment grade.
According to Moody’s, the revised outlook reflects expectations of gradually improving public finances and sustained implementation of structural reforms aimed at strengthening economic performance.
The agency said lower debt-service pressures could help stabilize the government’s debt burden over the coming years.
The outlook revision comes as South African authorities continue pursuing reforms across energy, logistics and infrastructure sectors to improve economic efficiency and attract investment.
Despite the improved outlook, Moody’s said South Africa’s credit profile continues to face structural constraints.
The agency highlighted weak economic growth potential, persistent labor market challenges and vulnerabilities within state-owned network infrastructure as factors limiting a stronger ratings upgrade.
Nevertheless, Moody’s expects economic activity to improve over the medium term and projects real gross domestic product growth could reach approximately 2% by 2028, supported by stronger investment and reform implementation.
South Africa’s government welcomed the decision, with the National Treasury of South Africa describing it as a positive signal for the country’s economic trajectory.
Treasury said the revision makes South Africa the only G20 economy currently holding a positive outlook from Moody’s.
The move could strengthen confidence among global investors at a time when policymakers are seeking to improve fiscal sustainability and restore stronger long-term growth.
The outlook change also raises expectations that South Africa could potentially move closer to regaining investment-grade status if reform momentum continues and economic conditions improve.
