Fitch has upgraded the outlook on SA's long-term foreign-currency issuer default rating to “stable” from “negative”, citing a faster-than-expected economic recovery.

“A recovery is under way and GDP now seems on track to return to pre-pandemic levels during 2022" Fitch said.

The ratings agency affirmed the country's sovereign debt rating at 'BB-', constrained by high and rising government debt, low trend growth and high inequality.

Fitch said the revision reflected SA's “surprisingly” strong fiscal performance this year and significant improvements to key GDP-based credit metrics after the rebasing of national accounts.

The Covid-19 pandemic continues to weigh on the economic performance of SA, the country worst affected by the pandemic on the African continent in terms of confirmed infections and deaths, Fitch said, adding that the likelihood of severe negative effects on creditworthiness has declined over the last year.

Reuters