Cape Town. 141022. Finance Minister Nhlanhla Nene at the Mid Term Budget Policy Statement(MTBPS) at Parliament. Pic COURTNEY AFRICA
JOHANNESBURG - S&P Global Ratings said on Tuesday it now forecasts higher economic growth for South Africa but the country needed a much stronger per capita growth for its credit rating to be upgraded.

“We are now probably in a good situation that supports our stable outlook, but we are not yet anywhere near going upwards as far as the rating is concerned,” said S&P Global sovereign analyst Gardner Rusike.

S&P downgraded South African debt to “junk” last year citing a deterioration in the economic outlook and public finances.

Meanwhile, the rand raced to a one-month high against the dollar yesterday and government bonds firmed as investors cheered Moody’s decision to change the country’s credit outlook to stable from negative.

Moody’s late on Friday affirmed South Africa’s debt at “Baa3”, the lowest rung of investment grade, saying the previous weakening of national institutions was gradually reversing and this was supporting an economic recovery. While the decision to affirm the rating was widely anticipated by market participants, the unexpected move to revise the outlook lifted sentiment.

At 5pm, the rand bid at R11.6581 to the dollar, 11.23cents firmer than at the same time on Friday. In fixed income, the yield on the benchmark 2026 paper was down 7.5 basis points to 7.915percent, reflecting the strongest bond prices since early 2015.