Cape Town, Nov 16 (IANS): South Africa welcomed the ratings agency Standard & Poor's (S&P) Global's decision to revise the country's outlook from "stable" to "positive," citing improved reform and growth potential.

In a statement released late on Friday night, S&P said: "The positive outlook reflects our view that increased political stability following the May general elections and impetus for reform could boost private investment and GDP growth, Xinhua news agency reported.

However, the rating agency maintained South Africa's long-term foreign and local currency debt ratings at "BB-" and "BB," respectively, both of which remain below investment grade.

According to S&P, since the formation of South Africa's Government of National Unity (GNU), "debt yields and portfolio inflows have improved, leading to easing financing conditions and currency strengthening"/

The GNU was formed by the African National Congress (ANC) and nine other political parties, including the Democratic Alliance (DA), after the ANC lost its parliamentary majority for the first time since 1994 in the May elections.

S&P also projected that South African gross domestic product (GDP) growth will rise to 1.4 per cent between 2025 and 2027, up from 1.0 per cent in 2024, as electricity load-shedding eases. However, it noted that ongoing logistics bottlenecks will continue to constrain economic activity.

In response, South Africa's Department of National Treasury said in a statement that "the government notes and welcomes S&P's decision to revise SA's outlook."

"The government's strategy focuses on achieving fiscal sustainability, supporting economic growth and critical social services, and addressing significant fiscal and economic risks," the statement added.