South Africa’s fiscal shield stands firm amid global turmoil

Key topics:Strong public finances cushion SA against external shocks.Treasury targets larger primary surplus to stabilise debt.Improved fiscal outlook boosts hopes of credit upgrades..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Alister Bull.South Africa’s stronger public finances have given the county a sizable cushion to absorb external shocks — such as the fallout from the conflict in Iran, according to the head of the National Treasury.“It would take a very large shock to derail our fiscal plans,” Treasury Director-General Duncan Pieterse told Bloomberg in an interview on Monday. “We have geared ourselves in a way that we can manage some deviation.”.The Treasury projects a primary surplus – which measures revenue minus non-interest spending – of 131 billion rand ($8.1 billion) in the fiscal year through March 2027.That’s 60 billion rand more than this fiscal year’s surplus, which was 0.9% of gross domestic product and will stabilize South Africa’s debt-to-GDP level, before it starts to shrink from 2026-27..Read more:.Boardroom Talk - When the strong do what they can - What the fall of Maduro means for South Africa.For South Africa to be pushed off this path of fiscal consolidation, revenue would either have to fall by 60 billion rand or government spending jump by the same amount, Pieterse said.The Iran war could impact South Africa’s economic outlook if it had a lasting impact on global growth or oil prices, he said, although any headwinds from more costly crude could be offset by higher prices for gold and other commodities.Finance Minister Enoch Godongwana said South Africa turned the corner on years of poor public finances when he presented his annual budget last week, citing a recent upgrade by S&P Global Ratings as a sign that the world has taken notice.The move has stoked optimism that the country may regain the investment-grade rating it lost after its finances deteriorated under former President Jacob Zuma, whose time in office was marred by corruption scandals and a surge in the national debt.S&P assess the country at BB with a positive outlook, while Moody’s Ratings has it Ba2. Both are two notches below investment grade.Pieterse said South Africa was moving in the right direction for more positive assessments of its credit. He declined to speculate on how long it would take to get back to investment grade, but said stronger-than-expected economic growth would definitely help accelerate the journey.Treasury’s best contribution was to make sure that the debt-to-GDP ratio declines after the current fiscal year and the primary surplus grows as forecast, said Pieterse, who will meet with rating agencies this week during a trip to Europe..© 2026 Bloomberg L.P.

South Africa’s fiscal shield stands firm amid global turmoil

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