The Fitch Ratings logo is seen at their offices at Canary Wharf financial district in London

Johannesburg - Ratings agency Fitch on Friday decided to affirm South Africa's long-term foreign and local currency credit ratings at 'BB+', although it maintained a stable outlook for the country. 

Fitch said that the decision to affirm South Africa credit rating at below investment grade ratings took into consideration that financial challenges at key state-owned enterprises (SOEs) remain substantial and the fact that government debt has yet to stabilise.

But the rating agency said that there were signs of recovering governance standards and the prospect of a mild cyclical recovery.

The agency said it believes that changes in the political leadership following the African National Congress (ANC) electoral conference in December 2017 have led to a significant improvement in economic confidence. 

Fitch also said it expects Gross Domestic Product growth to recover to 1.7 per cent in 2018 and 2.4 per cent in 2019 despite a sharp contraction in the first quarter.

According to Fitch, the ratings are supported by a favourable government debt structure, deep local capital markets, a healthy banking sector and strong institutions. 

In November, ratings agency S&P Global downgraded South Africa’s credit rating to full junk status while its counterpart Moody's placed the country on review for downgrade.

African News Agency/ANA