Budget 2026: Public finances 'emerging from the fiscal wilderness'

National Treasury says Budget 2026 marks a turning point for the country, as efforts to stabilise public finances begin to pay off.

Finance Minister Enoch Godongwana delivered the Budget Speech in Parliament on Wednesday with significantly less hassle than a year ago, when infighting within the Government of National Unity (GNU) stalled the process and created policy uncertainty.

Although he remains pragmatic, Godongwana’s tone has shifted toward optimism regarding the country’s finances finally reaching a turning point. In last year’s budget, the narrative was dominated by warnings and threats regarding the fiscal trajectory.

This time around, a more upbeat National Treasury says the outlook for economic growth is improving as reforms gather pace, with public finances “emerging from the fiscal wilderness.”

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A revised real GDP growth of 1.4% is expected for 2025, while growth for 2026 is forecast at 1.6%. While this remains only half of the government’s 3% target, a fourth consecutive quarter of growth signals better effects from more reliable energy and logistics provision, among a range of other reforms.

Godongwana noted that lower borrowing costs and an improved inflation outlook, driven by a reduced inflation target, will also encourage private investment and job creation.

“Faced with this crisis, we chose not to be defined by it. Instead, we turned it into a catalyst for change.”

Even with this cautious optimism, structural constraints continue to limit economic growth.

Critical reforms remain on the table to increase GDP growth, improve government efficiency, and scale up public investment.