Moody’s Ratings reports that South Africa’s government debt is poised to stabilize this year before beginning a gradual descent, supported by fiscal discipline and structural reforms. The agency said spending restraint, lower borrowing costs, and improving investor confidence are helping narrow the budget deficit, which is projected to fall from 4.5% of GDP in 2025 to 3.8% by 2027. It also forecasts the primary surplus will reach 1.8% of GDP by 2027, surpassing the threshold required to halt debt growth. Moody’s estimates government debt peaked at 86.8% of GDP this year and could ease to 84.9% by 2028. The ratings agency also expects economic growth to recover gradually to around 2% by 2028, from 0.5% in 2024, supported by reforms in electricity, logistics, and water infrastructure. Although high interest payments continue to constrain shock absorption, the stability of the Government of National Unity is seen as a safeguard for long-term growth.
CNBC Africa
