Pretoria: Director-General of the National Treasury, Duncan Pieterse, says global rating agency Standard and Poor's (S and P) decision to affirm South Africa's global rating is a sign that government is meeting its commitment to lower the debt-to-GDP ratio over the medium term while steadying public finances.

According to South African Government News Agency, S and P affirmed South Africa's long-term foreign currency sovereign credit rating at 'BB' and local currency rating at 'BB+' and maintained a positive outlook. Pieterse noted that the affirmation signals progress towards restoring the health of South Africa's public finances and the ability to continue this trajectory despite geopolitical challenges. With both S and P and Moody's placing South Africa on a positive outlook, Pieterse emphasized the potential to enhance economic growth and reduce public debt.

National Treasury highlighted that the outlook reflects potential for fiscal improvement and debt stabilization, dependent on continued consolidation and easing of the current energy-price shock. The ratings decision recognizes stronger revenue performance, enabling the government to maintain fiscal discipline while implementing measures to protect vulnerable households, including temporary fuel levy relief amid high global energy prices. These interventions align with the existing fiscal framework and do not compromise medium-term consolidation goals.

The ratings agency also acknowledged the acceleration of Operation Vulindlela, the government's structural reform plan aimed at addressing electricity, infrastructure delivery, and logistics constraints. Despite global headwinds and tight financial conditions, South Africa's economic growth is expected to remain moderate in the near term.

The retention of a positive outlook occurs as 23 sovereigns' S and P ratings have been negatively impacted since the onset of the Middle East conflict in late February, including 14 investment-grade sovereigns. Currently, South Africa is one of only two G20 nations, alongside Italy, on a positive outlook from S and P. The government remains committed to prudent fiscal policy, enhancing the credibility of the fiscal framework, and accelerating reforms to support growth, job creation, and service delivery. A principles-based fiscal anchor is being developed to reinforce the fiscal framework's credibility and durability.