Moody’s affirms South Africa’s sub-investment grade credit rating

Rating agency Moody’s has maintained South Africa’s credit rating at Ba2 with a stable outlook, keeping it at sub-investment grade.

In a statement released on Wednesday, Moody’s attributed its decision to the country’s strong and independent institutions, including the judiciary and central bank, a robust financial sector, and a solid external position.

However, the agency highlighted ongoing challenges. The move also acknowledges chronic challenges posed by the country’s inequalities which hamper reform progress and fuel social risk, as well as persistent structural constraints on economic growth, and a relatively high and costly debt, Moody’s stated.

The review follows a recent change by S&P, which revised South Africa’s outlook from stable to positive, citing progress in reforms and economic growth potential.

The National Treasury acknowledged Moody’s decision, reaffirming its commitment to structural reforms. The government will pursue policies to achieve rapid, inclusive, and sustainable economic growth while easing growth bottlenecks.

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