By Colleen Goko
South Africa needs faster economic growth and credible fiscal consolidation to secure its first credit rating upgrade in two decades, a senior S&P Global Ratings official said on Wednesday.
At its most recent review of South Africa last month, S&P affirmed the sub-investment grade ‘BB-/B’ foreign currency rating and maintained a “positive” outlook.
A “positive” outlook for sub-investment sovereigns is usually settled within a year, said Ravi Bhatia, director and lead analyst at S&P, referring to the timeframe the firm has to decide whether to upgrade the rating or downgrade the outlook.
S&P assigned its positive outlook on Africa’s most industrialized economy in November.
A rating upgrade hinges on three things: faster growth, credible fiscal consolidation and an absence of fresh bailouts for state-owned companies, Bhatia said.
“If the momentum continues – you see slightly better growth, steady fiscal consolidation and no extra bailouts – the pressure is
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