Fitch Ratings has affirmed South Africa’s long-term foreign and local currency debt ratings at ‘BB-‘.
- However, Fitch has warned that further increases in the government’s debt-to-GDP ratio due to persistent large fiscal deficits, as well as weakening economic growth, could lead to a downgrade.#
- SA’s rating is constrained by low real GDP growth hampered by power shortages, high level of inequality, a high government debt-to-GDP ratio, and a modest path of fiscal consolidation.
- Fitch expects SA’s consolidated fiscal deficit to widen to 4.5% of GDP in 2024, from 4.2% in this year.
- The agency also marked elevated sociopolitical risk as a core concern ahead of May 2024 general election.