SA is on track to meet its two main fiscal targets this year, stabilising its public debt and increasing the size of its primary budget surplus, the head of the Treasury says.
“We are in a period of fairly healthy budget dynamics,” director-general Duncan Pieterse said in an interview. “Our expectation is that we will meet our primary balance target and we will meet our debt-to-GDP target.”
Africa’s biggest economy has struggled to curb rising public debt after more than a decade of runaway spending that outpaced revenue growth. But this year the fiscal picture looks much better, with Treasury data for the first five months of the 2025/26 financial year showing revenue was up more than 10% and spending only about 4%.
Pieterse said spending had slowed in part because of the protracted approval of this year’s main budget, which was held up for months by political wrangling between the two main coalition partners, the ANC and the DA.
“There was a little bit of uncertainty at the beginning of the year because we were still busy finalising the budget and our sense is that uncertainty has found its way through into spending,” said Pieterse.
Another factor keeping a lid on spending is tighter controls around social grants, which is a major budget item as nearly one in three South Africans are recipients of state welfare payments.
SA’s debt-to-GDP ratio, a widely used measure of a country’s ability to repay its debt, shot up from 26% in 2009 to 77% in 2025. But it should now stabilise before declining, Pieterse said.
The Treasury hoped to grow its primary budget surplus, where revenue exceeded non-interest expenditure, to help push down debt and free up more money for public services such as health and education, and spending on items such as infrastructure that could potentially raise the country’s growth rate.
Finance Minister Enoch Godongwana will present the medium-term budget policy statement (MTBPS) on November 12, when he will give updated revenue and spending projections for this year and the three subsequent years.
Reuters
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