South Africa Eyes Investment Grade Return by 2028: Goldman Sachs

South Africa's economic prospects have brightened according to Goldman Sachs analysts who predict that the country could regain its first investment grade rating in 2028. The rating, which fell from BBB+ to BB- between 2010 and the early 2020s due to slowing growth and rising public debt, has seen improvements across three key areas: fiscal deficits have narrowed, public debt is declining, and growth has increased.

The analysts noted that the current policy mix will lead to sustained declines in public debt and medium-term GDP growth rates of around 2.5%, above the 1% growth seen in the past decade. Goldman Sachs also expects upgrades from S&P and Moody's over the next year, moving ratings from BB/Ba2 to BB+/Ba1.

The analysts' baseline scenario anticipates South Africa will regain its first investment grade rating in 2028, though timing carries two-sided risks. The current policy mix has supported economic policy continuity through the transition from single-party ANC majority rule to coalition government.