Moody's Ratings has described South Africa's medium-term budget policy statement as "positive for the country's credit profile", while Fitch Ratings expects government debt to rise slightly again in 2028/29. The two views set up rating reviews in the coming weeks.

Moody's, which rates South Africa Ba2 with a positive outlook, published its assessment on Monday 26 October. It said debt "has probably peaked" and did not announce a rating action.

What Moody's said

Moody's cited tighter monetary policy, continued fiscal consolidation despite higher oil prices, and nominal GDP growth weaker than assumed in February as the backdrop to the statement.

  • The 2026/27 consolidated deficit target was cut to 3.9% of GDP from 4.0%, and gross tax revenue was revised up by R17.1 billion, according to Moody's.
  • Moody's forecasts government debt at 84.9% of GDP by fiscal 2028, down from about 86.8% in fiscal 2025. Interest absorbed 18.8% of general government revenue in fiscal 2025, and Moody's says debt affordability remains weak.
  • Moody's said: "This is the second consecutive MTBPS without upward deficit revisions."
  • On the draft fiscal rules legislation, Moody's said it was credit positive but warned that "without a binding numerical target the legislation's credibility would require consistent application".

Where Fitch differs

Fitch, which upgraded South Africa to BB in June with a stable outlook, said on Monday that it still expects debt to stabilise at about 78% of GDP over the next two fiscal years. It expects debt to rise to 79% of GDP in 2028/29, mainly because of weak economic growth.

Fitch said: "Nevertheless, unlike the government, we expect debt to GDP to very modestly rise again."

Finance Minister Enoch Godongwana said in the mid-term budget that debt peaked at 78.4% of GDP in 2025/26 and will fall to 76.6% by 2029/30. Moody's and the Treasury quote different debt levels, and the sources we reviewed do not explain the gap, so the figures should not be compared directly.

What happens next

Moody's and S&P are scheduled to review South Africa's rating on 27 November, and Fitch on 11 December. All three rate the country two notches below investment grade.

The National Treasury said the positive outlooks at Moody's and S&P indicate they could look to upgrade within 12 to 18 months. Bank of America said it views Moody's as the most likely agency to act, with a potential upgrade to Ba1. Investec's Annabel Bishop said an upgrade is likely in around 18 months. Some economists see a November upgrade as unlikely.