ISTANBUL

Fitch Ratings said Friday it affirmed South Africa's long-term foreign currency issuer default rating at BB- with a stable outlook.

The rating agency said South Africa's rating is supported by the country's favorable debt structure, strong institutions and a credible monetary policy framework.

Those factors, however, are balanced against low real GDP growth, a high level of poverty and inequality, and a high government debt/GDP ratio.

Fitch said it expects real GDP growth of 0.9% this year, after 0.7% last year. Real GDP is forecast to show growth of 1.5% in 2025 and 1.3% in 2026.

"Growth is hampered by a struggling logistics sector, deeply entrenched structural factors, particularly high levels of inequality, poverty and unemployment, and weak investment," it said in a statement. "We expect the weakness to persist, despite robust demographics," it added. "Electricity shortages, which dragged on growth in 2022 and 2023, are expected to ease, but sporadic incidents of load-shedding could still occur."

While headline inflation eased to 4.6% in July, Fitch expects it to fall to 4.5% by the end of the year, 4% in 2025 and 2026, as food and oil prices continue their slowdown.