(Bloomberg) -- South Africa’s prospects for a credit rating upgrade improved after S&P Global Ratings lifted the nation’s outlook on its debt to positive from stable.

“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,” S&P said in a statement on Friday.

The sovereign ratings agency kept the nation’s foreign-currency long-term rating at BB-, three notches below investment grade.

Business confidence has improved since May 29 elections led to the formation of a new governing coalition that has made economic growth a top priority.

The so-called government of national unity joins the African National Congress with the centrist Democratic Alliance and several smaller parties. The alliance was formed after the ANC lost its majority for the first time since the end of White-minority rule in 1994.

The GNU has also committed to boosting job creation, reining in public debt and investing heavily in infrastructure.

“Government’s strategy focuses on achieving fiscal sustainability, supporting economic growth and critical social services, and addressing significant fiscal and economic risks,” Department of National Treasury said in a statement, welcoming S&P’s decision.

While the Treasury estimates that South Africa’s consolidated budget deficit will widen to 5% of gross domestic product in 2024/24, compared to a previous projection of a 4.5% funding gap, it still sees debt stabilizing in 2025/26, albeit at a marginally higher level of 75.5% of GDP.

S&P said it expects South African GDP growth will increase to 1.4% over 2025-2027 from 1.0% in 2024 as electricity load-shedding has eased.

(Adds Department of National Treasury comments in seventh paragraph.)