South Africa on Track to Meet Key Budget Targets, Says Treasury
South Africa appears set to meet its two main fiscal goals for 2025 — stabilising public debt and expanding its primary budget surplus — according to National Treasury Director-General Duncan Pieterse.
“We are in a period of fairly healthy budget dynamics,” Pieterse told Reuters. “Our expectation is that we will meet our primary balance target and we will meet our debt-to-GDP target.”
Stronger Fiscal Performance
Treasury data for the first five months of the 2025/26 financial year shows encouraging trends:
These figures suggest that South Africa’s fiscal position is improving after years of rising public debt and spending that outpaced revenue growth.
Pieterse said spending was held back partly by delays in approving the 2025 national budget, which was slowed by coalition negotiations between the African National Congress (ANC) and the Democratic Alliance (DA).
“There was a little bit of uncertainty at the beginning of the year because we were still busy finalising the budget,” he said. “Our sense is that uncertainty has found its way through into spending.”
Spending Controls and Debt Stabilisation
Tighter controls on social grants — one of South Africa’s largest spending categories — have also helped contain expenditure. Nearly one in three South Africans relies on state welfare payments.
The country’s debt-to-GDP ratio, which climbed from 26% in 2009 to 77% in 2025, is now expected to stabilise and begin declining, Pieterse said.
Treasury aims to strengthen the primary budget surplus — where revenue exceeds non-interest spending — to reduce the debt burden and free up funds for healthcare, education, and infrastructure investments that could boost long-term growth.
Mid-Year Review Ahead
Finance Minister Enoch Godongwana is set to deliver the Medium-Term Budget Policy Statement (MTBPS) on 12 November, where he will provide updated fiscal projections for the current and upcoming three years.
The review will be closely watched by investors and analysts for confirmation that the Treasury’s improving fiscal momentum can be sustained in the face of weak economic growth and ongoing political uncertainty.
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