Moody’s next review of South Africa’s credit rating is scheduled for 5 December. The agency currently rates South Africa at Ba2 (just below investment grade), with a stable outlook.
This comes after S&P Global Ratings upgraded both SA’s foreign currency long-term sovereign credit rating to ‘BB’ from ‘BB-‘ and local currency long-term sovereign credit rating to ‘BB+’ from ‘BB’ in November. The upgrade was the first upgrade for South Africa by any of the major credit rating agencies in over 16 years, and South Africa was one of just three countries globally to secure an S&P upgrade in 2025.
Although positive fiscal indicators delivered in Finance Minister Enoch Godongwana’s Medium-Term Budget Policy Statement on 12 November influenced the S&P decision, and have been noted by Moody’s analysts, it will take evidence of increased foreign and domestic investment, as well as the all-important GDP uptick, to give the agencies a degree of confidence in our sovereign risk going forward.
Black Friday and festive season offer retail cushion
December 2025 arrives with consumer spending forecast to grow 7% year-on-year following a robust Black Friday performance. Black Friday spending has now increased consistently over the past three years, and is anticipated to once again hit new highs this year, despite ongoing cost-of-living concerns. The combination of stable electricity, recovering consumer confidence, and strong tourism (26.9% YoY international visitor growth) has created favourable trading conditions for retail, hospitality, and service SMEs.
Tighter EU ties lead to historic investment framework
On 20 November 2025, South Africa and the European Union signed a Clean Trade and Investment Partnership in Johannesburg – the EU’s first such agreement globally. With bilateral trade valued at €45 billion in 2024 and the EU representing over 40% of foreign direct investment in South Africa, the partnership focuses on renewable energy, clean fuels, sustainable transport, raw-materials value chains, and climate-mitigation technologies. The partnership opens new market opportunities for SMEs in green-technology supply chains, renewable-energy services, and environmental goods, with potential access to EU investment and technical-cooperation programmes.
Key data releases round out the year
Statistics South Africa (Stats SA) released its third-quarter 2025 GDP figures on 2 December. The economy grew by 0.5% quarter-on-quarter, down from a revised 0.9% in Q2 – a marked slowdown in momentum. On a year-on-year basis, GDP rose by 2.1%, exceeding the 1.8% expected by economists. This data provides a picture of economic momentum heading into 2026, with full-year growth projected at approximately 1.2%. Subdued GDP figures signal constrained consumer demand and cautious business investment.
Stats SA will release November 2025 Consumer Price Index data around 17–18 December. October 2025 inflation stood at 3.6% year-on-year, comfortably within the South African Reserve Bank’s revised 3% target with a 1% tolerance band. With no MPC meeting scheduled for December, the November decision will carry through to January 2026. Continued low inflation supports consumer purchasing power during the festive season and keeps borrowing costs stable for SME working capital and asset financing needs.
December 2025 closes the year on a cautiously optimistic note for South African SMEs. The convergence of robust festive-season trading conditions, a historic credit-rating upgrade, and newly forged international partnerships offers both immediate revenue opportunities and longer-term strategic pathways. SMEs that leverage strong consumer demand through the peak retail period while monitoring key economic releases will be well-positioned to refine their operational and financing strategies heading into 2026.