Moody's Lifts South Africa Outlook to Positive, Keeps Ba2 Rating
Updated
Updated · Reuters · May 22
Moody's Lifts South Africa Outlook to Positive, Keeps Ba2 Rating
8 articles · Updated · Reuters · May 22
Moody's revised South Africa's outlook to positive from stable while affirming its long-term foreign and local currency issuer ratings at Ba2.
The agency cited stronger fiscal performance, progress on structural reforms, a rising primary surplus and improving debt-service costs that should stabilize debt soon and start a gradual decline.
South Africa's government welcomed the move after years of debt buildup driven by weak growth, support for state-owned firms and the COVID-19 shock.
Moody's still said the rating is capped by weak fiscal and economic fundamentals, low growth potential and high inequality, while the Iran war clouds the outlook for fuel-importing economies such as South Africa.
The outlook change adds to improving investor sentiment after S&P upgraded South Africa to BB from BB- in November, its first sovereign rating upgrade in nearly 20 years.
Is Moody's positive outlook a true sign of recovery or a temporary fix for South Africa's deep economic troubles?
As the Iran war threatens global energy, can South Africa's domestic reforms shield its fragile economy from the storm?