GNU drama around Medium-Term Budget Policy Statement unlikely, suggest economists

VS

Vicky Stark

11 November 2025 | 11:37

The big news for the budget will likely be about monetary policy and a lower inflation target. We interview PwC Chief Economist Lullu Kruger and Isaah Mhlanga, Chief Economist at RMB.

GNU drama around Medium-Term Budget Policy Statement unlikely, suggest economists

Finance Minister Enoch Godongwana. Picture: GCIS

Will there be disagreements among members of the Government of National Unity (GNU) when Finance Minister Enoch Godongwana tables the Medium-Term Budget Policy Statement on Wednesday? Objections to a proposed VAT increase delayed the main budget being tabled this year.
PwC Chief Economist Lullu Kruger thinks it's unlikely we'll see a repeat of this.
"Mostly because the big announcements will probably wait for February, so we might get some direction around tax increases in February, which we probably will. But it's not the point in the budget cycle where you expect massive announcements."
She said that the medium-term budget also gives a view of what we can expect for the next three years.
"It is really an opportunity to look at longer-term plans, longer-term progress and how we are going to make some of the structural adjustments that we need to make."
Kruger said that while being off the Financial Action Task Force's grey list is to be celebrated, corruptionwas still a problem.
She said it deterred many long-term investors who want to put down roots in South Africa, like food manufacturing companies in smaller towns.
"Corruption is taking a lot of money and funding away from areas where it should go. That remains a massive issue that the government seems to be dealing with in some patches but not across the board."

RMB Chief Economist Isaah Mhlanga believes the big news for the budget will likely be about monetary policy.
"Markets are expecting some announcement on whether the national treasury will give the go-ahead for the lower 3% inflation target."
He said that tax collection had been going extremely well.
"We also have good control of spending. Treasury will run a primary surplus for the third year in a row. That is a good story to tell."
And how much impact will the performance of state-owned entities have on the budget?
"We're seeing a gradual repairing of the SOE space, which means less need for state support, which should be good from a credit rating perspective. Perhaps next year there is a strong case for a ratings upgrade."
S&P has a "positive outlook" on South Africa. "But on account of growth, we are still on 1%, that's why we are a little bit sceptical, but everything else has improved" said Mhlanga.
Finance Minister Enoch Godongwana will deliver his Medium-Term Budget Policy Statement at 2 pm on Wednesday.
To listen to Mhlanga and Kruger's full discussion with Bongani Bingwa, click below:
Get the whole picture 💡

Take a look at the topic timeline for all related articles.

Trending News