South African Finance Minister Enoch Godongwana is expected to signal the country’s commitment to fiscal discipline on Wednesday, with its debt-to-GDP ratio set to decline for the first time in more than two decades — potentially paving the way for a credit-rating upgrade as soon as next month.

Four of 11 economists surveyed by Bloomberg, including those at Bank of America, Morgan Stanley, BNP Paribas SA and Old Mutual, anticipate an upgrade by year-end, while the rest see it coming in 2027.

Moody’s Ratings’ and S&P Global Ratings’ next reviews are scheduled for November 27, and Fitch Ratings’ for December 11.

“We view Moody’s as the most likely agency to act, with a potential upgrade to Ba1, while an S&P upgrade to BB+ remains a closer call,” Tatonga Rusike, BofA’s sub-Saharan Africa economist, said. Fitch is in no rush after its upgrade in June, he said.

Moody’s said last week Africa’s largest economy is heading for its first upgrade by the company since 2009, provided its fiscal performance continues to improve.

Morgan Stanley expects S&P to raise South Africa’s rating to BB+ next month and Moody’s in early 2027. Both rating companies have South Africa on positive outlook, and an upgrade by either would lift the country to one notch below investment grade, putting it on the path to exit junk status.

Investec Wealth & Investment International sees a greater than 50% chance the country regains its investment-grade credit rating within two years and BofA expects it to do so before 2029. Rating companies will need evidence of “a durable improvement in fiscal metrics, including lower deficits, falling government debt and firmer trend growth,” Rusike said.

When Godongwana delivers his medium-term budget policy statement at 2 pm in Cape Town on Wednesday, he’s expected to show the National Treasury beating its consolidated budget-deficit forecast of 4% of GDP for 2026-27, with economists surveyed by Bloomberg estimating a shortfall of 3.8%.

They also project the Treasury to have met its goal of stabilising debt in the year through March 2026. The debt-to-GDP ratio is forecast to decline to 77.5% this fiscal year, slightly slower than the Treasury’s projected drop to 77.3%.

“We are in a position where we have our public finances in order,” Keabetswe Mojapelo, head of economic research at Old Mutual, said.

South Africa’s economy has largely withstood the fallout from the wars in Iran and Ukraine, while the government has kept spending in check despite heightened global uncertainty. That resilience, together with plans to introduce a fiscal anchor, is strengthening the case for a rating upgrade.

“We’ve managed to weather this current shock quite well from a fiscal perspective and this is really unprecedented on the South African side because normally these kinds of shocks put us in a worse off position,” Mojapelo said. “We have two rating agencies that have put us on a positive outlook and for the most part I don’t see how from a fiscal perspective we get any worse off, even in managing these windfalls.”