Fitch Ratings upgraded South Africa’s long‑term sovereign issuer default rating from BB‑ to BB on 5 June 2026, citing prudent fiscal management and progress on fiscal consolidation despite weak growth and external shocks. Outlook stable.
Fiscal primary surpluses averaged 1 % of GDP over the last four years, reversing a previous average primary deficit of 0.6 % of GDP covering FY ending March 2012 to FY 2019.
Debt‑to‑GDP remains well below the level that prompted the 2020 downgrade; Fitch expects it to stabilise around 80 % of GDP over the next two years, still above the 2027 BB median of 53 %.
Consolidated primary fiscal surplus is projected to widen to 1.7 % of GDP in FY 2027 (up from an estimated 1.2 % in FY 2025), reducing the consolidated fiscal deficit to 3.8 % of GDP in FY 2027.
Real GDP growth is forecast to rise modestly from an average of 0.7 % in 2023‑24 and 1.1 % in 2025 to 1.4 % in 2027, still below the BB median of 4 %.
Supply‑side constraints in the energy and logistics sectors have eased due to structural reforms, supporting the modest growth outlook.
The interest‑to‑revenue ratio is high at 19 % in 2027 versus the BB median of 11 %.
The South African Reserve Bank raised its policy rate by 25 basis points in May 2026; Fitch anticipates an additional 25‑bp increase later in 2026 as headline inflation is expected to reach 4.5 % by year‑end, above the SARB’s target of 3 % ± 1 pp.
