Pitch, South Africa Credit Rating Outlook Upgraded from 'Negative' to 'Stable' Unexpectedly

An article published in the Saturday edition of a South African local newspaper on the 27th of last month (local time), amid many countries around the world imposing virtual lockdowns such as flight suspensions on South Africa, where the new COVID-19 variant 'Omicron' is spreading. The article shows a photo of an empty Hong Kong airport with the headline "The world is closing its doors to South Africa." [Image source=Yonhap News]

International credit rating agency Fitch unexpectedly upgraded South Africa's sovereign credit rating outlook from 'negative' to 'stable'.

According to foreign media including Bloomberg on the 16th, Fitch explained that South Africa's economy "appears to be on track for recovery, with gross domestic product (GDP) returning to pre-pandemic levels during 2022."

Fitch projected South Africa's economic growth at 4.7% for this year, 2% for 2022, and 2.4% for 2023, respectively.

However, Fitch maintained South Africa's sovereign credit rating at 'BB-', three notches below investment grade, due to high government debt, low growth, and significant inequality remaining as constraints.

Fitch noted that South Africa has surprisingly shown strong fiscal performance this year, with substantial improvement in core GDP-based credit metrics after fundamental recalibration of national accounts.

Bloomberg explained that despite rising COVID-19 cases due to the spread of the new Omicron variant, this assessment is positive for South Africa.

This content was produced with the assistance of AI translation services.