Johannesburg,South‌ Africa – S&P Global Ratings has upgraded South Africa’s long-term foreign currency credit rating to BB from BB-,according to a report released​ today. This upgrade reflects positive developments following the recent Medium-Term budget Policy Statement (MTBPS), the country’s removal from the Financial Action⁢ Task Force (FATF) grey list, and indications of improved economic growth.

The⁤ upgrade brings South Africa’s rating within two notches ⁤of investment grade and aligns ⁤it with Moody’s rating for the first time in several ‌years. S&P Global also maintained a positive outlook on the rating, suggesting the possibility of further ‌improvements contingent ‍on sustained reform efforts and continued ⁤fiscal consolidation.

A Decade of Downgrades Reversed

this decision represents a important shift in South Africa’s‌ creditworthiness, marking a turning point after more ​than a decade of successive downgrades that commenced​ in 2012.The‌ previous downgrades had ‌considerably impacted investor confidence and increased borrowing costs for the nation.

Factors Driving the Upgrade

The upgrade occurs ⁤during a period of renewed ⁤investor interest in ​emerging markets, influenced by shifting expectations regarding‍ US interest rates. South Africa is benefiting from ‌a combination of factors, including prudent fiscal management, ‌improvements in electricity supply,​ and ongoing reforms in critical sectors like⁣ logistics.

Implications ⁤for South Africa

The improved credit rating⁢ is expected to ‌potentially lower borrowing costs for the South African government ⁢and bolster foreign investment in South African assets. However,it’s crucial to note that South Africa remains classified as “junk” status and will require continued commitment to⁣ structural reforms to regain investment-grade status.