CAPE TOWN - South Africa’s government debt will stabilise in 2025/26 at 77.9% of the Gross Domestic Product (GDP).
This marks the first time since the 2008 financial crisis that public debt is expected not to grow as a percentage of the GDP.
Finance Minister Enoch Godongwana revealed this on Wednesday as he presented the Medium-Term Budget Policy Statement.
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According to Godongwana, the turnaround comes as part of the fiscal strategy aimed at, among other things, anchoring fiscal policy by stabilising debt and growing the primary budget surplus, mobilising and directing more resources towards infrastructure investment, as well as improving the efficiency of spending.
“Since 2008, spending has consistently exceeded the revenue, driving up debt and debt service costs. These costs crowded up spending on critical services and put additional pressure on landing rates across the economy. But we are now turning things around,” he said.
Godongwana says as of this year, revenues will exceed the budget estimate by R19.3 billion, while debt service costs will be lower by R4.8 billion.
The Minister says the country will achieve a primary surplus of R68.5 billion, which will grow to R224 billion by 2028/29.
Additionally, real GDP growth of 1.25% is expected for 2025, more than double the economic growth in 2024.