Finance Minister Enoch Godongwana, has just completed presenting the MTBPS in Parliament on November 12, 2025, provided a reasonably upbeat tone despite the forecast of continuing, low economic growth challenges.
Key Highlights:
- Economic Outlook: GDP growth has been revised lower to 1.2% for 2025 (from 1.4% in the February budget), reflecting softer global conditions and domestic constraints like logistics and energy. Medium-term growth is now projected at 1.8% by 2027/28, supported by reforms in energy, developments in freight, and ports.
- Inflation Target Shift: Godongwana has, as expected set a new 3% target (with a 1% tolerance band either side), down from the prior 3-6% range, to anchor expectations and support monetary policy. Godongwana noted more pros than cons for stability and growth.
- Fiscal Consolidation: Consolidated budget deficit is set to narrow to 4.6% of GDP in 2025/26 (from the 4.8% tabled in the May budget), aided by an R18 billion revenue surplus from SARS and tax collections exceeding forecasts by R20 billion. Debt-to-GDP ratio is expected to peak at 75.3% in 2025/26 before stabilising and moving downwards.
- Revenue and Expenditure: Gross tax revenue up R20-50 billion annually from improved compliance; additional R15.8 billion in-year spending, including R2 billion for Parliament rebuilding, R1 billion for 2026 elections, and R100 million for G20 summit hosting. Public Transport Network Grant scaled down (redirected via Targeted and Responsible Savings initiative) due to underperformance. The Treasury again signalled it’s intention to end the Social Relief of Distress (SRD) grant by March 2027 which was introduced during Covid pandemic, in 2020 and is still being paid .
- Structural Reforms: Progress according to the minister, has been made with Operation Vulindlela, including the ending of load-shedding, energy grid upgrades, and private sector investments in North West’s electricity transmission grid. The minister said that the government was commitment to G20 presidency priorities, with an Africa focus, and exiting FATF greylist.
The speech emphasized fiscal discipline, growth acceleration, and inclusive reforms under the GNU.
Key Responses from Industry, Corporate Leaders, and Economists
Initial reactions are cautiously positive, focusing on fiscal relief and inflation anchoring, though critics highlight austerity risks:
- Economists: VanEck’s Chief EM Economist Natalia Gurushina called it a “thumbs up” for the rand (ZAR has strengthened tonR17.06 (+0.5%) post-announcement), praising the 3% target as a fiscal anchor; formalising it in 2026 could boost further. Bloomberg economists hailed a “turning point” from tax windfalls, easing debt pressures.
- Industry/Corporate: SARS Commissioner Edward Kieswetter welcomed the R18 billion surplus as validation of compliance efforts. Property sector’s Just Property CEO Paul Stevens noted cooling inflation (3.4% in September) supporting market stability.
- Labor/Unions & Politics: COSATU urged bolder anti-austerity moves pre-speech, warning of job losses; post-delivery, EFF Treasurer-General Omphile Maotwe criticized privatisation push and 360,000+ job losses in H1 2025, demanding policy shift. GOOD Party’s Brett Herron called for a clear Growth Acceleration and Inclusion (GAIN) strategy to address unemployment at 32%.
