The government has welcomed rating agency Moody’s decision to affirm South Africa’s long-term foreign and local currency debt ratings at BA2 and revised the outlook from negative to stable.
According to Moody’s, the key driver behind the decision is the improved fiscal outlook that raises the likelihood of government’s debt burden stabilising over the medium term.
National Treasury says over the last two fiscal years, the government has shown it was able to reprioritise its spending, while staying committed to fiscal consolidation, which Moody’s expects will remain the case going forward.
It says the government is using a portion of the additional revenue it collected from taxpayers to accelerate debt stabilisation, with the majority targeted to address urgent social needs, promote job creation through the presidential employment initiative, and support the public health sector.
