Godongwana cuts SA growth forecast to 1.2% but says debt has stabilised at 78.4%
Finance Minister Enoch Godongwana cut South Africa's 2026 growth forecast to 1.2% from 1.6% in his medium-term budget on Wednesday. He said government debt had stabilised at 78.4% of GDP in 2025/26, for the first time in nearly two decades.
Slower growth, steadier debt
Godongwana said a prolonged conflict in the Middle East, alongside El Niño, could weaken growth further. "Domestic economic activity has already lost some momentum, especially in export-linked sectors," he said.
| Forecast | February budget | October MTBPS |
|---|---|---|
| Real GDP growth, 2026 | 1.6% | 1.2% |
| Real GDP growth, 2027 | 1.8% | 1.6% |
| Budget deficit, 2026/27 | 4.0% of GDP | 3.9% of GDP |
Sources: 2026 MTBPS speech; Business Day.
The Treasury expects the primary surplus, where revenue exceeds non-interest spending, to grow from 1.7% of GDP this year to nearly 3% by 2030. It sees the deficit falling to 2.5% by 2030.
Relief at the pump
Business Day said petrol and diesel prices had risen nearly 50% and 72% over the past seven months. From 4 November to 1 December, the levy will fall by R3 a litre for diesel and R1.50 for petrol. It will then be cut by R1.50 and R1 until 5 January. To fund it, R10 billion transferred to the Central Energy Fund will be returned to the National Revenue Fund and put into the Contingency Reserve.
Markets and reaction
The yield on the 2048 bond fell 18 basis points to 9.16%, News24 reported. Business Day said the benchmark R2035 yield fell as much as 16 basis points to 8.575%, and the rand ended flat at about R16.39/$.
News24 said the Treasury also plans a bond buyback programme in 2026/27. Godongwana said draft fiscal anchor legislation is expected to be tabled in Parliament in 2027. The Treasury says it is designed "instead of a rigid numerical rule".
It is beyond shameful that despite the R13bn worth of savings in social grants, yet again there is no inflationary relief for the 8-million destitute SRD grant recipients.
Business Leadership South Africa welcomed the debt figures and said it expects further upgrades, according to Business Day.
