Bank of America and BNP Paribas are among the economists who expect a South Africa credit rating upgrade before the end of 2026, following the Medium-Term Budget Policy Statement that Finance Minister Enoch Godongwana tables in Cape Town on Wednesday, 21 October. The forecasts come from a Bloomberg survey published by Moneyweb and BusinessTech on 20 October. The survey ties the optimism to a projection that government debt will fall as a share of GDP for the first time in more than two decades.
Which agency and which month the banks name
Four of the 11 economists in the Bloomberg survey, from Bank of America, Morgan Stanley, BNP Paribas and Old Mutual, expect an upgrade by year-end. The other seven expect one in 2027.
Bank of America’s sub-Saharan Africa economist, Tatonga Rusike, points to Moody’s. “We view Moody’s as the most likely agency to act,” he said, adding that a move to Ba1 was possible, while an S&P upgrade to BB+ was a closer call. He said Fitch, which upgraded South Africa in June, was in no hurry to move again. Bank of America expects South Africa to regain investment grade before 2029.
Morgan Stanley is the only bank in the reports that names a month. It expects S&P to raise South Africa to BB+ in November and Moody’s to follow in early 2027. The reports list BNP Paribas among the four economists expecting a year-end upgrade, but they do not say which agency or month BNP has in mind.
Moody’s and S&P are both scheduled to review South Africa on 27 November. Fitch’s review is set for 11 December.
Where the ratings stand now
In May, Moody’s affirmed South Africa at Ba2 and changed its outlook from stable to positive, SAnews reported. National Treasury said this made South Africa the only G20 country on a positive outlook from Moody’s. It was the agency’s first positive outlook on the country since 2007, a run that ended in an upgrade in 2009. The Bloomberg reports say S&P also has South Africa on a positive outlook. Neither report gives S&P’s or Fitch’s current rating.
A move to Ba1 at Moody’s or BB+ at S&P would leave South Africa one notch below investment grade.
On 14 October Business Day reported that Moody’s sees more room for an improvement in the rating than for a downgrade. The agency said it will treat the medium-term statement and next year’s budget as a test of whether recent fiscal gains turn into a lasting fall in debt. It will look at spending trends, revenue collection and the support that commodity prices give to revenue. It also wants an updated fiscal framework that can hold spending restraint through an election cycle.
The numbers behind the forecast
Economists in the survey expect debt to fall to 77.5% of GDP this fiscal year. That is a slightly smaller drop than the 77.3% the Treasury projected. The Treasury is expected to have met its goal of stabilising debt in the year to March 2026.
The survey puts the 2026-27 consolidated budget deficit at 3.8% of GDP, better than the Treasury’s own forecast of 4%.
Rusike said the agencies will need to see a durable improvement in fiscal metrics, including lower deficits, falling government debt and firmer trend growth. Old Mutual’s head of economic research, Keabetswe Mojapelo, took a firmer view. “We are in a position where we have our public finances in order,” she said. Investec Wealth & Investment International puts the chance of South Africa regaining investment grade within two years at more than 50%.
Why the rating matters beyond government
The sovereign rating sets the baseline for how lenders price South African risk. A higher rating generally lowers the premium investors demand on government bonds, and that yield curve is the reference point for banks, state-owned companies and listed firms that borrow in rand.
These are forecasts, not decisions. None of the three agencies has announced a change, and Moody’s has tied any upgrade to continued fiscal improvement.
What to watch in the statement
Our preview of the Medium-Term Budget Policy Statement sets out the numbers going in and the items to track, from the revised growth forecast to the debt path. For the rating agencies, the deciding signals are the final deficit figure, whether the debt ratio does start to fall, and whether the Treasury publishes the updated fiscal framework that Moody’s has asked for. The first agency verdicts are due on 27 November.
