Finance Minister Enoch Godongwana will table the 2026 Medium-Term Budget Policy Statement in Parliament on Wednesday, 21 October, with economists expecting stronger revenue than planned and a narrower deficit.

The central question, according to Econometrix chief economist Azar Jammine, is how the larger primary surplus is spent. He says the state has some leeway.

What economists expect on revenue and the deficit

Johann Els, chief economist at PSG Financial Services, says the tax overrun could reach R50 billion or more, with gains in mining taxes, personal income tax and VAT. He expects the budget deficit to narrow to about 3.5% of GDP this financial year, from the 4% projected in February, and the primary surplus to rise to about 1.9% of GDP from 1.4%. He doubts Treasury will carry the full windfall into its future projections.

Jammine says the state benefited from higher commodity prices, especially platinum and gold. Published figures put revenue at 39% of budget in the first five months, against 37% a year earlier. Investec economist Annabel Bishop attributes the improvement to higher precious-metals prices.

Debt, ratings and the spending question

In February, Treasury projected gross debt would stabilise at 78.9% of GDP in 2025/26 and fall to 76.5% by 2028/29, according to published budget coverage. Treasury director-general Duncan Pieterse has said government is on track to stabilise debt this year and reduce it afterwards.

Moody's expects general government debt to peak near 87% of GDP in 2025/26 and fall to 84% by 2030. Its measure includes most state-owned enterprise guarantees, so it runs above Treasury's. Moody's says an upgrade would need sustained fiscal discipline, a credible decline in debt, better debt affordability and growth. It names a prolonged energy price shock as the main risk to public finances.

The International Monetary Fund has cut its 2026 growth forecast for South Africa to 1.0% and projects 1.3% for 2027. As we reported, Fitch has upgraded South Africa for the first time in 21 years; published reports say all three major agencies still rate the country two notches below investment grade.

Same-day data and the Reserve Bank backdrop

One report says Statistics South Africa is due to release September consumer price inflation on 21 October, and that the market expects 4.6% against 4.4% in August. The report says the Reserve Bank's Monetary Policy Committee raised the repo rate by 25 basis points to 7.25% on 23 September and that its next statement is due on 19 November. These points come from a single report and need a second source.

What we do not yet know

  • The figures Godongwana will actually table. Replace expectations with Treasury's numbers once the speech starts.
  • The correct February baseline. One source gives the 2025/26 deficit as 4.5% of GDP; Els cites 4% projected in February. They may refer to different years or measures. Check the February budget review.
  • Whether the statement changes the fuel levy or proposes a Road Accident Fund levy. Published coverage mentions both debates but gives no figures.
  • The CPI release time and outcome.