What should we expect from the 2025 Medium-Term Budget Policy Statement?

Stephen Grootes speaks to Sanisha Packirisamy- Chief Economist at Momentum Investments about what to expect from this week’s Medium-Term Budget Policy Statement.

Listen to the interview in the audio player below.

Finance Minister Enoch Godongwana will deliver the Medium-Term Budget Policy Statement (MTBPS) in Parliament on Wednesday, outlining updated revenue and expenditure projections and allocating additional funds to key areas where needed.

This year’s midterm budget comes later than usual, following delays to the main budget earlier in the year due to legal challenges over the proposed VAT increase.

The MTBPS is expected to reflect lessons learned from that process while providing a clearer picture of government’s fiscal position for the remainder of the year.

Alongside the MTBPS, Godongwana will also table the Adjustments Appropriation Bill and several tax-related bills, setting the stage for Parliament’s consideration of revised spending priorities and fiscal measures aimed at stabilising South Africa’s public finances.

Speaking to Stephen Grootes on The Money Show, Sanisha Packirisamy, Chief Economist at Momentum Investments says there is an expectation that Godongwana will formally announce a readjusted inflation target of 3%.

"I think the market is very much in a toss up about whether or not we're going to get that formal announcement being made. But I think if you look at where fixed income markets have moved, they've basically already priced in that the SARB is implicitly targeting the bottom end of the 3-6% target range,"says Packirisamy.

"If we see that National Treasury has inflation numbers that are closer to the current mid-point inflation target range further out in their economic forecast, it could imply that their revenue assumptions are based on an over estimation of inflation, and that will concern markets," added Packirisamy.

Scroll to the top of the article to listen to the full interview.