Finance Minister Enoch Godongwana tables the Medium-Term Budget Policy Statement in Parliament on Wednesday 21 October 2026, and the numbers he presents will shape borrowing costs, tax expectations and the climate for every company that sells, hires or invests in South Africa. Here is what the statement is, what the figures look like going in, and what economists are saying beforehand.
What the Medium-Term Budget Policy Statement does
The statement is not a second budget. According to a Daily Maverick analysis by Ed Stoddard, it sets out the fiscal framework and policies for the next three years, with projections, and prepares the ground for the February budget. Tax rates and detailed allocations normally wait for February. October is where Treasury resets its growth, revenue and debt assumptions, and where businesses get an early read on the direction of travel.
The numbers going in
The starting point is the February budget. Business Day reported that the consolidated budget deficit was projected to narrow from 4.5% of GDP in 2025/26 to 3.1% of GDP in 2028/29, and that gross loan debt stabilises at 78.9% of GDP in 2025/26 before declining to 76.5% by 2028/29. Gross debt was put at R6.12-trillion rising to R6.94-trillion over the same period. The same report put the gross borrowing requirement at R563.4bn for 2025/26, including R80bn for Eskom debt relief, falling to R380bn in 2026/27.
Moody’s uses a broader measure. In a Business Day report of 14 October, the agency said it expects general government debt to have peaked at about 87% of GDP in 2025/26, falling to 84% by 2030. That measure includes most guarantees to state-owned enterprises, so it is higher than the Treasury figure. Both numbers describe the same country, and neither is wrong.
Treasury Director-General Duncan Pieterse said the government is on track to stabilise debt as a share of GDP in 2025/26 and reduce it afterwards. He said Treasury has recorded primary surpluses for three consecutive years and expects a fourth, projected at about R131bn this year, with monthly revenue collections running ahead of budget estimates, mainly because of corporate income tax. We could not confirm a current debt-service cost figure from a source we fetched, so we leave it out.
What economists expect
These are expectations, not outcomes. Eyewitness News reported that economists anticipate stronger-than-expected revenue alongside continued caution from Treasury. Johann Els, chief economist at PSG Financial Services, said the tax overrun could reach R50 billion or more, with gains in mining taxes, personal income tax and VAT. He expects the 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 also warned that Treasury is unlikely to carry the full revenue windfall into its future projections.
Azar Jammine of Econometrix said higher commodity prices, especially platinum and gold, would have helped the state, and that a larger primary surplus would help stabilise debt. He said government has a bit of leeway, with the focus on how the surplus is spent.
The Daily Maverick analysis, which is opinion, says revenue was 39% of budget in the first five months of the fiscal year against 37% a year earlier, and quotes Investec chief economist Annabel Bishop attributing this to higher precious-metals prices. It says Godongwana must make a convincing case that debt can be stabilised at 80% of GDP within two years and then brought down. Note that the 80% figure is the author’s framing and sits above the Treasury’s 78.9% peak.
Pressures on the day
Growth is the weak spot. The Daily Maverick piece records that GDP contracted 0.2% in the second quarter of 2026 and that the IMF cut its 2026 forecast to 1.0% on 13 October, with 1.3% projected for 2027. Our own reporting has covered that cut, along with the debate over the general fuel levy and a proposed Road Accident Fund levy. The analysis adds that fuel prices hit record highs on 7 October and that the Reserve Bank has warned of second-round inflation effects.
Moody’s flags a prolonged energy price shock as the main downside for public finances. It expects stronger investment to lift growth gradually toward 2% by 2028. Support for state-owned entities is part of the debt picture too: the February borrowing requirement included R80bn for Eskom debt relief, and Moody’s counts most state-owned enterprise guarantees in its debt measure. Local government elections are due in November, which the Daily Maverick analysis lists among the risks.
What to watch on the day
- Revised growth forecast. Treasury’s new 2026 and medium-term growth numbers, set against the IMF’s 1.0%.
- Deficit and primary surplus. Whether they land near the 3.5% and 1.9% of GDP that Els expects, against the 4% and 1.4% pencilled in for February.
- The debt path. The new peak and the year debt begins to fall, plus how Treasury treats state-owned enterprise guarantees.
- Revenue overrun. How much of it Treasury builds into future years, and how much it holds back.
- Fiscal framework. Moody’s said it is waiting for details of an updated framework, which government said could appear in the statement, and sees it as key to keeping spending restraint through an election cycle.
The ratings picture adds weight to the day. The Daily Maverick analysis says S&P raised South Africa a notch in November 2025 with a positive outlook, Fitch upgraded in June 2026, and Moody’s moved its outlook to positive. All three still rate the country two notches below investment grade. Moody’s, per Business Day, says an upgrade requires sustained fiscal discipline, a credible decline in debt and better debt affordability, and that growth is central to that assessment. For anyone running a business, the relevant questions are what the statement means for borrowing costs, tax planning and the cost of fuel and electricity in the year ahead. We will report the figures once they are tabled.
