Debt-to-GDP Revised Sharply Lower After GDP Rebasing: What It Means for South Africa
South Africa’s debt-to-GDP ratio has been revised sharply lower after Statistics South Africa updated its GDP data. The update showed the economy was 5.3% larger last year than previously estimated. National Treasury said in a statement on Thursday that the debt ratio peaked at 74.6% in 2025/26, down from the 78.4% estimated in the 2026 Medium Term Budget Policy Statement (MTBPS).
What changed
Stats SA shifted the base year for calculating GDP to 2022, and the result is a bigger economy on paper. GDP at current prices was R8 trillion last year, compared with R7.6 trillion previously reported. The rebasing exercise, which updates the measurement of the economy to reflect major structural changes, is generally done every five years.
Treasury says other key fiscal ratios have shrunk as well.
The revised numbers
| Measure |
Previous estimate (MTBPS) |
Revised |
| Debt-to-GDP peak (2025/26) |
78.4% |
74.6% |
| Primary surplus, 2026/27 |
1.7% of GDP |
1.6% of GDP |
| Main budget deficit, 2026/27 |
3.7% of GDP |
3.5% of GDP |
| Primary surplus, 2029/30 |
n/a |
2.8% of GDP |
The primary surplus is revenue minus interest expenditure.
What Treasury says
Treasury Director-General Duncan Pieterse said the updated calculations confirm that government continues to meet its fiscal targets, with metrics looking even better than projected. He added that Treasury is restoring fiscal credibility, and that South Africa is seeing the benefits in lower borrowing costs and a stronger foundation for investment and growth.
Why it matters for the credit rating
Analysts said the improved metrics, which ratings agencies watch closely, could have positive implications for South Africa’s credit rating. Moody’s Ratings suggested this month that an upgrade may be under consideration after the government stabilised debt as a share of GDP.
South Africa’s rating has been on an upward path since being cut to junk status in 2017, amid exploding deficits during the scandal-marred rule of President Jacob Zuma. It still sits two notches below investment grade.
The caveat: it’s a mechanical revision
Treasury was clear that this is a “mechanical” revision. It has not changed the assumptions in its budget estimates, nor its revenue, spending or debt estimates. The debt ratio falls because the denominator, the size of the economy, is bigger, not because debt itself is lower.
Jee-A van der Linde, senior economist at Oxford Economics, made the same point in a client note: a larger nominal economy reduces debt as a share of GDP, but it does not improve the real growth needed to create jobs. Oxford Economics still expects subdued GDP growth of around 1% this year and next.
What it means for you
- For the economy: Lower reported debt ratios may support investor confidence and borrowing costs over time.
- For households: Nothing changes immediately. Jobs, incomes and growth are unaffected by a rebasing.
- For investors: Watch how rating agencies respond, and whether growth picks up.
The bottom line
The rebasing gives South Africa’s public finances a better-looking scorecard and could strengthen the case for a rating upgrade. But the underlying economy hasn’t changed overnight. The real test remains whether growth and employment improve.
Source: National Treasury statement and Statistics South Africa GDP rebasing, as reported in the original article.
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