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Goldman Sachs predicts an upgrade of South Africa's credit rating
Economy
South Africa's fiscal performance for the 2025/26 financial year will likely trigger positive ratings from major rating agencies,
Goldman Sachs said on Thursday.
March's fiscal data completed the fiscal year picture: revenue exceeded the February budget estimate by about 0.2 percentage points of GDP, while expenditure remained flat, Goldman Sachs economist Andrew Matheny wrote in a research note.
Risks to the Treasury's fiscal deficit estimate of 3.7% of GDP are tilted to the upside, Matheny noted.
Goldman Sachs expects continued improvement in fiscal performance to lead to an upgrade of the sovereign credit rating from the current median of BB to BB+ over the next year.
Moody's is expected to upgrade the Ba2 rating outlook from stable to positive at its scheduled review on May 22, according to the note.
S&P may upgrade its BB rating at its scheduled review on May 29, given the positive outlook in place since November, along with the significant fiscal outperformance, Metheny wrote.