Rusike: S.Africa’s 2025 budget requires a firm spending grip

South Africa's economy has been a topic of discussion for many years, with structural bottlenecks, electricity shortages, and governance issues creating challenges. However, Bank of America's latest research note points towards the possibility of rating upgrades for the country if certain conditions are met. Tatonga Rusike, Sub-Saharan Africa Economist at Bank of America, highlighted key factors that could lead to an upgrade in South Africa's economy. One of the significant changes that have taken place is the reduction in load shedding and the positive impact of the government of national unity following the elections, which has boosted confidence and the anticipation of further reforms. These developments have set a positive tone for the economy. The recent mid-term budget statement from the Treasury, although slightly negative, remains in line with the targets set earlier in the year. Rusike emphasized the importance of maintaining a stable fiscal stance to help stabilize and reduce debt to GDP ratio. He noted that if South Africa continues on this path, there could be a turn in the ratings outlook, with potential for upgrades in the coming years. While the country has seen stability in ratings over the past few years, achieving real GDP growth close to 2% will be critical in convincing rating agencies of a positive trajectory. Rusike suggested that positive outlooks could begin to emerge by the first half of the next year, leading to possible upgrades in the future.