South Africa’s budget update and recent international rating actions have delivered reason for cautious optimism – yet the core challenge of slugging growth remains. In the recent 2025 Medium Term Budget Policy Statement (MTBPS), the National Treasury revised its economic-growth forecast for the year down from 1.4% to 1.2%, and trimmed the 2026 projection from 1.6% to 1.5%. Growth is then expected to rise gradually to 1.8% in 2027 and 2% in 2028 – still modest given population growth.
Despite its slugging pace, three positive developments emerged:
- A lower inflation-target regime (3% midpoint, 2-4% band) which promises improved monetary discipline.
- The persistence of the debt-to-GDP ratio levelling off at around 77.9% in 2025/26, signalling fiscal consolidation.
- S&P Global Ratings upgraded South Africa’s credit rating—the first such move in nearly two decades- citing reform momentum and improved fiscal fundamentals.
For business leaders and risk managers, these changes matter. A stronger fiscal position and lower inflation environment reduce financing risk and improve operational planning horizons. However, low growth still weighs heavily on investment, employment and medium-term resilience.
Your next steps:
- Reassess currency and interest-rate exposure in light of improved policy credibility
- Review your capital-structure and risk-financing arrangements for refinancing opportunities
- Revisit your strategic risk-profile: a stronger macro backdrop doesn’t eliminate structural risks (energy, logistics, labour) that demand active management.
At Simah, our job is to help you review where these external shocks could affect your business – and more importantly, how to build resilience in your risk architecture to withstand them. Let’s talk about your exposure, revisit your cover, check your supply-chain assumptions and ensure your risk profile remains robust in a changing world.