Johann Els, Chief Economist at PSG Financial Services
The MTBPS was a good medium-term budget policy statement. While not all the numbers came out exactly as I expected, overall it continued to move in the right direction, with potential ratings upgrades to come. It was thus a market-friendly, investor-friendly and ratings agency-friendly budget.
The revenue overrun in the current fiscal year is estimated at around R53bn. It could have been higher if it wasn’t for the fuel levy relief earlier this year and another round coming in November and December. The fuel levy relief will also help, as November and December inflation will now likely be a touch lower than previously expected.
The MTBPS confirmed continued fiscal consolidation. The consolidated budget deficit improved slightly to 3.9% of GDP, from the 4% projected in the February Budget. While this is higher than the around 3.5% I expected, the difference reflects additional spending on unforeseen items. Tax revenue overruns over the next few years will also, to a large extent, be used to increase infrastructure spending. This should be seen as a big positive for future economic growth.
The consolidated budget deficit is expected to decline further to 2.5% of GDP by 2029/30.
The primary surplus is expected to reach 1.7% of GDP this year, compared with 1.4% expected at budget time. This is projected to rise to 2.9% by 2029/30. We are now moving back to the period from the mid-90s to around 2008, when we had sustained primary surpluses – which helped reduce the debt ratio sharply back then.
The debt ratio peaked last year at 78.4% (with 78.2% expected this fiscal year) and is expected to decline gradually over the medium term, reaching around 66% by the mid-2030s. The debt ratio over the next few years is slightly higher than projected in the February Budget, partly because of a lower nominal GDP forecast.
Much of the additional revenue this year and over the next few years will be absorbed by higher spending. However, much of this is infrastructure spending, which is a positive. The focus remains on fiscal consolidation, alongside ongoing reforms in energy, logistics, water, visa reform and the passenger rail sector, among others. These reforms, combined with better infrastructure spending, should support stronger economic growth. That is a big positive.
The funding changes are also important. Lower weekly bond auctions should support the bond market, while the introduction of bond buybacks will give Treasury more flexibility in managing its debt. The MTBPS is positive for sovereign credit ratings, and I expect upgrades from S&P and Moody’s. The review dates are coming up soon. I think at least one agency could upgrade at its next review, while the other might wait until after the February 2027 Budget.
Overall, this is a market-friendly and ratings-friendly budget. Fiscal consolidation remains key, even if the deficit improves more slowly than I expected this year. The important point is that we continue to run primary surpluses, with the deficit and debt ratios gradually declining. That is a big positive for the sustainability of government debt and should help reduce the pressure from interest payments over time.
Frank Blackmore, Lead Economist at KPMG South Africa
The release of the medium-term budget policy statement today has a lot of good news within it. First of all, because of the windfall gains from higher commodity taxes, there’s been more collection of revenue than was anticipated in the February budget. This has meant a number of things. Firstly, the size of the primary surplus of the government expenditure can be increased. The fear was that, due to the slower economic momentum, this would this would have to be decreased at this point, but it will be increased.
It also has allowed more expenditure to take place this year on the number of important initiatives, including the various commissions that are trying to root out corruption and malfeasance within a few of our sectors of the economy, while also directing funding towards protecting the social wage, gender-based violence, femicide, and fighting crime and corruption. So, this is all good news.
Obviously, the change in commodity prices will not last for a long time, but at this point, those windfall gains are put to effective use and also to the relief of South African people. It will allow the government to institute a reduction in the fuel levy once again, as we did had earlier in the year, where diesel prices; the fuel levy will be cut by R3, petrol levy by R1.5, for at least the November and December months.
From January, then those reductions will reduce in size, depending on what lies ahead at that point with respect to those fuel costs. So, a bit of relief we see for customers and businesses in that respect.
Specifically, it has important ramifications for inflation in the economy, as most goods are moved around the country using vehicles that use diesel. I think this will be welcomed there, and the push through into the prices of products will be less than if this was not done.
Then we’ve seen for the risk ratings of the country as a whole, maintaining or increasing the surplus and the primary balance of the government’s accounts is also good for that. Another positive is that the windfall gain can be allocated to various positive causes.
So, all in all, we see this as a good medium-term budget policy statement, and we have to hope that we can keep the windfalls going as we move into the next budgetary period, in February 27.
Umesh Madhav, Head of Business Banking Coverage at Standard Bank South Africa
The 2026 Medium-Term Budget Policy Statement (MTBPS) sends a positive signal on fiscal stability, infrastructure investment and increasing private-sector participation. The real measure of success, however, will be the extent to which these developments translate into tangible growth for South Africa’s small and medium-sized enterprises (SMEs).
Infrastructure investment
Among Enoch Godongwana’s most significant announcements for the business sector are government’s continued commitment to infrastructure investment, efforts to accelerate public-private partnerships and reforms aimed at improving the business environment. The Minister also reaffirmed that public debt is now declining as a percentage of GDP, following government’s commitment to stabilise debt, highlighted positive rating actions by all three major global credit-rating agencies during this year, and pointed to an infrastructure pipeline of approximately R217 billion through the Infrastructure Fund, alongside more than R100 billion in projects approved through the Budget Facility for Infrastructure.
While these developments contribute to a more stable operating environment, their impact will ultimately depend on implementation and the extent to which SMEs are able to participate in emerging economic opportunities.
“Infrastructure projects create opportunities far beyond construction. They can stimulate demand across logistics, professional services, manufacturing, technology and business services, creating important avenues for SME growth and job creation. The key will be translating investment commitments into practical opportunities that are accessible to businesses of all sizes,” says Umesh Madhav, Head of Business Banking Coverage at Standard Bank South Africa.
Importantly, the opportunity for SMEs lies not only in direct project participation, but also in the broader value chains that support infrastructure delivery, including transport, maintenance, engineering support services, equipment supply, consulting, ICT and other business services.
Public-private partnerships
The growing emphasis on public-private partnerships and alternative funding models also reflects an increasing recognition of the role that the private sector will play in driving economic expansion and supporting development objectives.
Economic growth
At the same time, challenges remain. The MTBPS forecasts economic growth of 1.2% in 2026, rising to 1.6% in 2027 and 2.0% by 2029, underscoring the need for effective implementation of reforms, improved service delivery and greater inclusion of SMEs in economic value chains.
As South Africa seeks to convert policy intent into economic outcomes, the extent to which businesses of all sizes are able to meaningfully participate in infrastructure programmes, emerging value chains and broader investment opportunities will be an important determinant of sustainable and inclusive growth.
Jurgen Eckmann, Wealth Manager at Consult by Momentum
Government’s books are healing faster than most households’ budgets. The Minister told us debt has stabilised at 78.4% of GDP and is now falling, and the deficit is a little better than February’s forecast. That is good news for the long run. But it doesn’t put money back in your pocket this month, with inland petrol above R30 a litre and prime at 10.75%.
The fuel relief is welcome, but keep it in perspective. The levy cut takes R1.50 a litre off what you would otherwise pay for petrol from 4 November, about R75 on a 50-litre tank. Early forecasts point to another increase in November, so the cut may only soften it rather than lower the price at the pump. Diesel gets more help, at R3 a litre. And the relief tapers in December and ends on 5 January, right when January’s bills land. Don’t plan your budget around it.
Treasury now expects tax revenue this year to be R17.1 billion higher than it forecast in February, below the R40 billion to R50 billion some economists had anticipated, and much of it comes from commodity prices that won’t last. I wouldn’t count on tax relief in February. The relief you can count on is already there: qualifying retirement fund contributions are deductible up to 27.5% of income, subject to an annual cap of R430,000, and you can contribute up to R46,000 a year to a tax-free savings account. Make use of these allowances where appropriate before the tax year ends on 28 February.
Growth was cut to 1.2% for this year. In a slow economy, your job is your biggest financial asset. Build an emergency fund of three to six months of expenses, where possible, and keep your two-pot savings for genuine financial emergencies.
For crypto investors, Treasury and the Reserve Bank say they aim to move away from pre-approvals for cross-border crypto transactions. It’s still a draft, so nothing changes yet. Keep your records clean and stay tax compliant.
Hayley Parry, Money Coach and Facilitator at 1Life’s Truth About Money
As government reviews its finances, it’s time to review our own
The Medium-Term Budget Policy Statement gives us an opportunity to reflect not only on the state of South Africa’s finances, but on the state of our own household finances too.
While the Minister of Finance has been talking about managing government debt, spending responsibly and building financial resilience, these are principles that South Africans can apply to their own money.
And with so many households under financial pressure, perhaps now is a good time to revisit the basics.
The announcement of temporary fuel levy relief is certainly welcome. From 4 November, the levy on petrol will be reduced by R1.50 per litre and diesel by R3 per litre, providing some much-needed breathing room for consumers.
But the important word here is temporary. The relief starts to taper in December and ends in early January.
For households where every rand is already committed to essentials, this may simply make it a little easier to get through the month. But for those who do have some flexibility, it’s worth thinking carefully about what to do with that saving. Rather than allowing temporary relief to become additional spending, could we use some of it to improve our financial position?
One of the key messages from the Minister’s speech was the importance of managing debt. Government has made progress in stabilising its debt, with a focus on reducing borrowing costs and creating more room in the budget for essential services and investment.
There’s a useful lesson here for households too.
Debt repayments, particularly on expensive credit such as credit cards and personal loans, can consume a significant portion of our monthly income. The more we spend servicing debt, the less money we have available for other priorities. Paying down expensive debt doesn’t just reduce what we owe. It can free up future income and give us greater financial flexibility.
And then there’s perhaps the most fundamental principle of personal finance: spend less than you earn.
It sounds simple, but we know that for many South Africans, particularly in the current economic environment, it’s incredibly difficult.
Still, understanding exactly what comes in, what goes out and where adjustments might be possible is an important starting point. Just as government is looking at how to reduce waste and prioritise spending, we should be asking ourselves whether our money is going towards the things that matter most.
The mini budget is ultimately about making choices with limited resources. And while the scale and complexity are very different, that’s something every household can relate to.
So perhaps the most useful thing we can take away from today’s announcement is a reminder to give our own finances a mini-budget review. Understand what you earn, review what you spend, tackle expensive debt and, where possible, start creating a little breathing room. Because while we can’t control the national budget, we can take steps towards improving our own financial position.
ENDS
