South Africa’s Finance Minister Enoch Godongwana has unveiled a reform-focused 2025 Medium-Term Budget Policy Statement (MTBPS), outlining measures to stabilise public finances, spur growth, and rebuild confidence in the country’s economy.
The revised framework projects real Growth Domestic Product (GDP) growth of 1.2% in 2025 and an average of 1.8% through 2028, with government debt expected to stabilise at 77.9% of GDP — marking the first time since 2008 that the debt ratio is projected to stop rising.
In a major policy shift, the South African Reserve Bank will adopt a new inflation target of 3%, plus or minus one percentage point, replacing the previous 3–6% band. The move aims to lower inflation expectations and borrowing costs to attract investment.
Godongwana said the government will prioritise infrastructure-led growth, with capital payments set to rise 7.5% over the medium term and new financing instruments, including an infrastructure bond, to mobilise private-sector capital.
The minister reaffirmed government’s commitment to social spending, noting that more than 60% of non-interest expenditure over the next three years will support low-income and vulnerable households.
While the statement emphasises fiscal discipline and reform, Godongwana warned that sustained growth will depend on implementing energy, logistics, and municipal reforms.
The 2025 MTBPS signals Pretoria’s intent to balance fiscal consolidation with inclusive growth, positioning South Africa to reclaim economic momentum amid a challenging global environment.
