Fitch diverges from National Treasury on debt outlook

Fitch Ratings expects South Africa’s debt as a percentage of GDP to start rising again in the year to March 2029 mainly due to weak economic growth, challenging National Treasury and Moody’s Ratings’ projections.

Fitch said in a statement on Monday that it still expects debt to stabilise at about 78% of GDP over the next two fiscal years – a key factor behind its June decision to upgrade South Africa to BB, two notches below investment grade, with a stable outlook.

“Nevertheless, unlike the government, we expect debt to GDP to very modestly rise again” in 2028-29 to 79% of GDP, it said.

Finance Minister Enoch Godongwana said in his Medium-Term Budget Policy Statement (MTBPS) last week that debt peaked at 78.4% of GDP in 2025-26 and will decline to 76.6% by 2029-30.

Moody’s also sees debt on a downward path. The company, whose measure includes most government guarantees to state-owned enterprises,