The National Treasury says it has noted rating agency Fitchs decision to affirm the countrys long-term foreign and local currency debt ratings at BB- with a stable outlook.
The BB ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time.
However, it says the ratings are supported by a favourable debt structure and a credible monetary policy framework.
Fitch noted progress in the implementation of the 35 priority reforms under Operation Vulindlela, which it says will contribute modestly to economic growth, estimated at 1%.
It says while the formation of the Government of National Unity (GNU) has lowered short-term policy uncertainty, it warns that risks to political stability remain, with some topics such as foreign policy, social grants, and National Health Insurance (NHI) potentially contentious.
