South Africa’s budget revenue may exceed forecast by R70 billion — TimesLIVE
In South Africa, analysts expect government revenue in the 2026/27 fiscal year to exceed the budget forecast by R70 billion, mainly due to higher corporate income tax receipts from the gold mining and precious metals sectors. This could strengthen expectations of upgrades to the country’s sovereign credit ratings, TimesLIVE reports.
Finance Minister Enoch Godongwana is due to present the medium-term budget policy statement on October 21. Bank of America forecasts South Africa’s budget deficit at 3.5% of GDP in 2026/27, while the government’s target is 3.7% of GDP. If spending remains restrained, the deficit could decline to 3% of GDP, according to the bank.
Debt and financing
According to Bank of America, South Africa’s National Treasury has already raised about 60% of the financing required for the 2026/27 fiscal year in just five months, while its external financing programme has effectively been completed. Analysts believe that lower debt-servicing costs and limited short-term financing risks will help reduce the ratio of public debt to GDP to 77% this year, from 79% last year.
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PSG chief economist Johann Els also expects a conservative budget statement. In his assessment, excess tax revenue could amount to R50 billion or more, while the deficit could narrow to about 3.5% of GDP, compared with the 4% envisaged in the February budget. He added that the primary budget surplus could rise to about 1.9% of GDP from the 1.4% forecast in February.
Rating agencies’ expectations
Moody’s and S&P are expected to publish updates to South Africa’s sovereign ratings at the end of November, according to Bank of America, while Fitch is expected to do so in December. Analysts consider an upgrade by Moody’s to Ba1 the most likely outcome. A possible upgrade of S&P’s foreign-currency rating to BB+ could imply a BBB- local-currency rating if the agency maintains a one-notch difference between the assessments.
Fitch upgraded South Africa’s rating to BB in June 2026 and assigned a stable outlook. At the same time, Els stressed that there is no room for additional spending: R420.6 billion, or about 21% of government revenue, has been allocated for debt servicing in 2025/26.
