Moody's sees South Africa's government debt stabilizing in 2026

South Africa's government debt is projected to stabilize this year and begin a gradual decline, according to Moody's Ratings. The credit rating agency cited stronger tax revenues, restrained spending, and improved financing costs as key factors. However, debt levels above 80% of GDP remain a constraint on the government's ability to absorb economic shocks. Moody's forecasts the budget deficit to shrink and real GDP growth to increase by 2028, supported by reforms and stable consumption, though the 2027-2029 election cycle will test reform sustainability.