South Africa is making progress towards a sovereign credit upgrade. This as rating agency Standard and Poors S P Global revised South Africas outlook to positive from stable on Friday night.
S P has kept the countrys rating at sub investment grade or junk. However, the latest improvement in the outlook points to a high likelihood of an upward rating revision in the near to medium term.
According to S P, the increased political stability following the May 2024 general elections and impetus for reform could boost private investment and GDP growth. South Africa lost its investment grade in 2017.
Analysts expect rating upgrade to start next year as the projected economic growth targets are being realised. The higher ratings action could trigger buying in government bonds by institutional investors.
This in turn could support the rand.
