Fitch Affirms SA's BB- Credit Rating with Stable Outlook

Fitch, the credit rating agency, has maintained South Africa's credit rating at BB- with a stable outlook, signalling the country's continued status at sub-investment grade.

Key factors cited by Fitch for this rating include low real GDP growth, high inequality levels, and a rising government debt-to-GDP ratio. Additionally, ongoing power shortages and challenges in the logistics sector are seen as hindrances to economic growth.

While Fitch anticipates a reduction in the intensity of load-shedding in 2024 and 2025, it expects the issue to persist to some extent. The agency forecasts that increased capacity from private-sector investments will help alleviate the strain on the electricity grid.

In response to Fitch's decision, the government acknowledges the need for reforms to attain investment-grade status. Plans include boosting GDP growth by addressing electricity and logistics provision issues, as well as improving infrastructure delivery.

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