Positive Fiscal Performance#
Goldman Sachs has indicated that South Africa's financial performance in the 2025/26 fiscal year may lead to favorable credit rating changes from major agencies. This assessment was shared in a note by economist Andrew Matheny on Thursday.
Revenue and Expenditure Insights#
Recent budget data for March revealed that South Africa's revenue exceeded the February budget estimate by approximately 0.2 percentage points of GDP (Gross Domestic Product). Meanwhile, government spending remained consistent with expectations, suggesting a stable fiscal environment.
Outlook for Credit Ratings#
Matheny noted that the risks associated with the Treasury's fiscal deficit estimate of 3.7% of GDP lean towards a positive outcome. Goldman Sachs forecasts that ongoing fiscal improvements could result in upgrades to the country's sovereign credit rating, potentially moving from the current BB rating to BB+ within the next year.
Upcoming Rating Reviews#
Moody’s is anticipated to revise its outlook on South Africa’s Ba2 rating to positive from stable during its review scheduled for May 22. Similarly, S&P may consider upgrading its BB rating in its review on May 29, especially given the favorable outlook established since November and the notable fiscal outperformance.