S&P Global decision to revise SA's credit rating outlook to positive is welcomed

The ratings agency has also affirmed the long term foreign and local currency debt ratings at BB minus and BB respectively.

Credit rating agency Standard & Poor's. Picture: AFP

CAPE TOWN - The decision by ratings agency, S&P Global to revise South Africa's credit rating outlook to positive from stable has been broadly welcomed as the country battles to recover from Covid-19.

The ratings agency has also affirmed the long term foreign and local currency debt ratings at BB minus and BB respectively.

S&P Global says recent favorable terms of trade in South Africa have improved the external and fiscal trajectory.

It also says the country's reasonably large net external asset position, flexible currency and deep domestic capital markets provide strong buffers against shifts in external financing.

This is seen as good news as the country navigates through various global pressures as the war in Ukraine continues.

Earlier this week, Reserve Bank governor Lesetja Kganyago said growth was expected to be 1.7% for this year, revised down from 2%.

Kganyago added that the country is not achieving its full growth potential.

S&P Global says it expects South Africa to post a current account surplus in 2022, for the third consecutive year as prices for key metals and mining exports have risen significantly since the start of the Russia-Ukraine conflict.

Stronger commodity prices are helping local miners and also improving the tax base.

The revision of the credit rating outlook to positive is good news for the country as it aims to achieve stronger growth.