WATCH LIVE | Enoch Godongwana delivers the Medium-Term Budget Policy Statement
South Africans squeezed by rising food and fuel prices will be hoping for some good news when Finance Minister Enoch Godongwana delivers the Medium-Term Budget Policy Statement (MTBPS) today.
The statement, often called the “mini budget”, gives an update on government spending plans and revenue halfway through the financial year – and could set the tone for relief in 2025.
Economists say the minister may endorse the Reserve Bank’s push to lower South Africa’s inflation target to help tame prices and make borrowing cheaper.
Reserve Bank Governor Lesetja Kganyago has proposed narrowing the current 3% to 6% inflation range to a flat 3%, saying it would support “sustainable economic growth and cheaper borrowing costs”.
Investec treasury economist Tertia Jacobs said a lower target would strengthen policy credibility.
“What we have seen is that South Africa’s target range is actually at the top end of most emerging markets,” said Jacobs.
Jacobs added that, “if the government can embrace it because it means broader buy-in, that will give impetus and support to the Reserve Bank”.
While any change won’t bring instant price cuts, it could help keep prices steady over time, reduce interest rates, and free up funds for services instead of debt repayments.
Anchor Capital economist Casey Sprake said this year’s MTBPS comes after a tough start to 2025 but with early signs of an improving fiscal picture.
“Broader consultation and indications of improving in-year fiscal performance suggest that this year’s statement may unfold in a more measured and hopefully less divisive manner,” said Sprake.
Sprake said strong VAT, personal and corporate income tax collections have kept the country’s finances on a firmer footing.
After five months of the financial year, the main budget deficit sits at R215 billion – smaller than at the same point last year, said Sprake.
Sprake said gross tax revenues are up 9% year-on-year, adding R63 billion to the fiscus, driven by solid tax receipts despite slow economic growth.
Nedbank Corporate and Investment Banking has forecast a R60 billion tax windfall this year, giving Treasury slightly more space to manage spending pressures.
Sprake said robust revenue growth has underpinned much of the recent fiscal improvement, and the government’s efforts to restrain expenditure have been equally important.
Debt-service costs have also come in lower than expected, though struggling state-owned enterprises continue to weigh heavily on public finances, said Sprake.
Investec chief economist, Annabel Bishop, said government’s burden of high debt is partially due to it helping rescue state-owned enterprises.
“If you don’t have sustainable finances, if you keep on borrowing, it actually runs away with you,” she said.
“South Africa’s near-term fiscal picture appears comparatively healthy,” Sprake said.
Today’s statement will show whether government can balance fiscal discipline with the urgent need to ease the pressure on consumers.
What the mini budget means for you
- No quick fixes, but a lower inflation target could help stabilise prices and make borrowing cheaper over time.
- Tax revenue boost gives Treasury some breathing room — about R60 billion more than expected.
- Lower debt costs mean slightly less pressure on government spending.
- Strong VAT and income tax collections show households and businesses are still spending — a positive sign for the economy.
- Struggling SOEs like Eskom and Transnet remain a drain on public funds, limiting how much help government can offer consumers.
- Infrastructure investment could improve long-term growth and jobs if private-sector participation expands.
- Expect no major new handouts — fiscal restraint remains the message.
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