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Bond Market News
South Africa Upgraded to BB by Fitch
June 8, 2026
South Africa was upgraded by a notch to BB from BB- by Fitch. The upgrade was driven primarily by the sovereign’s track record of fiscal prudence and consolidation progress. The country has posted average primary surpluses of 1% of GDP over the past four years. On the fiscal path, Fitch expects the consolidated primary surplus to increase to 1.7% of GDP by FY2027 from an estimated 1.2% in FY2025, supported by strong revenue collection, capped public sector wage growth, and lower real-terms transfers to local governments and households. The overall fiscal deficit is projected to narrow to 3.8% of GDP by FY2027. Debt-to-GDP is expected to stabilise around 80% through FY2027 before rising again modestly from FY2028 due to persistently weak growth. On the external side, the current account deficit is expected to remain contained at around 0.6% of GDP through 2027, with high PGM and gold prices offsetting the impact of elevated oil prices. FX reserves are forecast to stay above 5.5 months of external payments. Debt structure remains a credit positive, with average maturity exceeding 10 years and foreign-currency debt at just 8.9% of the total. However, political risk has risen modestly, with an impeachment committee established against President Ramaphosa in May 2026.
South Africa’s dollar bonds traded stable. Its 5.875% 2030s were at 102.8, yielding 5.1%.
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