Fitch sees SA debt rising to 79% by 2028, unlike Treasury. Why it matters

Fitch Ratings expects South Africa's debt burden to start creeping up again in 2028/29, less than a week after Treasury told Parliament that debt has peaked and is now falling.

In a statement on Monday, 26 October, Fitch said government debt should hold at about 78% of GDP over the next two financial years, then rise "very modestly" to 79% in 2028/29, mainly because of weak economic growth (News24).

What does Treasury say about the debt?

Finance Minister Enoch Godongwana's Medium-Term Budget Policy Statement (MTBPS) last week said debt peaked at 78.4% of GDP in 2025/26 and will fall to 76.6% by 2029/30 (Moneyweb). In his speech he said debt as a share of GDP "is now falling" (National Treasury).

The numbers are close. The disagreement is about direction: Treasury sees a steady decline from here, while Fitch sees the ratio flattening and then edging up.

Why does Fitch expect debt to rise again?

Growth. Fitch expects the economy to grow by only 1.1% this year and 1.4% in 2027, with higher oil prices and lower investment weighing on the outlook (EWN). When the economy grows slowly, debt takes up a bigger share of GDP even if spending is kept in check.

Fitch did give Treasury credit. It said the MTBPS showed fiscal consolidation is on track, with higher revenue offsetting extra spending, and that energy and logistics reforms could lift investment and growth over the medium term (EWN).

This is not a new view. When Fitch upgraded South Africa in June, it already said that "unlike the government" it expected debt to rise again from 2028 at a moderate pace, primarily due to low growth (Fitch, 5 June 2026).

Does this change South Africa's credit rating?

No. Monday's statement was a comment on the MTBPS, not a rating decision. Fitch rates South Africa BB, two notches below investment grade, with a stable outlook, after upgrading it from BB- in June (Fitch, 5 June 2026).

Moody's is more upbeat. On Friday it called the MTBPS credit-positive and said debt peaked last year and is set for a "clear, albeit gradual" decline, though it warned that South Africa has limited room to absorb shocks. Moody's also rates the country two notches below investment grade, but with a positive outlook (News24).

When are the next rating reviews?

• Moody's: expected on 27 November 2026
• Fitch: expected on 11 December 2026

Both dates were reported by News24.

Why do these forecasts matter to you?

Ratings affect what it costs the state to borrow, and South Africa already spends a big slice of its income on interest. In June, Fitch forecast interest at 19% of government revenue in 2027, against a median of 11% for BB-rated countries (Fitch, 5 June 2026). Money that goes to interest can't be spent on grants, hospitals or roads.