The government has noted Fitch’s decision to affirm South Africa’s long-term foreign and local currency debt ratings at ‘BB-’ and maintain a stable outlook.
According to Fitch, South Africa’s credit rating is constrained by low real gross domestic product (GDP) growth hampered by power shortages, a high level of inequality, a high government debt-to-GDP ratio, and a modest path of fiscal consolidation.
National Treasury said the ratings are supported by a favourable debt structure with long maturities and denominated mostly in local currency as well as a credible monetary policy framework.
“Government is implementing urgent measures to reduce loadshedding in the short term and transform the sector through market reforms to achieve long-term energy security.
“Over the medium‐term, the fiscal strategy aims to achieve fiscal sustainability by reducing the budget deficit and stabilising the debt-to-GDP ratio.
“On‐budget allocations for infrastructure and other policy priorities and maintaining a sustainable fiscal stance will support economic growth,” National Treasury said on Monday.