South Africa has received a boost in investor confidence after Moody’s revised the country’s sovereign credit rating outlook from stable to positive, while affirming its long-term foreign- and local-currency ratings at Ba2.
The decision, announced alongside comments from the South African government, places the country in a unique position among Group of Twenty (G20) members, with the National Treasury noting that it is currently the only G20 economy with a positive outlook from Moody’s.
The upgrade comes despite a broader trend of sovereign rating pressure globally, with more than 23 sovereign credit ratings reportedly downgraded or negatively affected since the onset of the ongoing Middle East conflict.
In its assessment, Moody’s attributed the improved outlook to South Africa’s gradually strengthening fiscal performance and its continued implementation of structural reforms, which are expected to yield more tangible economic results over time.
“The agency expects a rising primary surplus and gradually improving debt-service costs to stabilise the government debt burden in the near term,” the National Treasury said in a statement.
Moody’s further indicated that while external geopolitical risks, including the Middle East conflict, may weigh on near-term growth, South Africa’s policy response is expected to remain measured, with macroeconomic stability largely preserved.
The rating agency projects that increased investment, supported by ongoing reforms, could lift real gross domestic product growth to about 2% by 2028, alongside sustained fiscal improvement. It also expects the primary fiscal surplus to reach around 2% of GDP by 2028, contributing to a gradual decline in the debt-to-GDP ratio.
National Treasury Director-General Duncan Pieterse said the decision reflects improving fiscal credibility, driven by what he described as a turnaround in the sustainability of public finances.
“We continue to focus on our two fiscal objectives: ensuring that revenue remains higher than non-interest spending, and maintaining a debt-to-GDP ratio that declines from the current year onwards,” Pieterse said. “We plan to embed the fiscal turnaround through the introduction of a fiscal anchor for South Africa.”
The Treasury reaffirmed government’s commitment to reducing public debt while maintaining social expenditure and accelerating structural reforms aimed at supporting inclusive growth and job creation.
The positive outlook marks Moody’s first for South Africa since 2007, followed by a rating upgrade in 2009.
The development comes after a recent one-notch upgrade by S&P Global Ratings in November 2025, which also maintained a positive outlook for the country.
