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South Africa Sets 3% Inflation Target as Mini-Budget Maps Debt Stabilisation and Reforms

Treasury says the tighter anchor will first depress nominal growth, with gains expected as borrowing costs decline.

Overview

  • Finance Minister Enoch Godongwana replaced the 3%–6% range with a 3% target and a one‑percentage‑point band, to be implemented over two years.
  • Government projects public debt to stabilise at about 77.9% of GDP in 2025/26 as lower borrowing rates ease debt‑service costs.
  • The MTBPS forecasts GDP growth of roughly 1.2% in 2025 and a medium‑term average near 1.8%, with persistent structural bottlenecks still weighing on momentum.
  • Transparency and efficiency steps include a Procurement Payments Dashboard and a data‑driven payroll audit that has flagged 8,854 potential ghost‑worker cases, with verification starting January 2026.
  • A contingency for about R20‑billion in tax measures is set for 2026 if SARS collections fall short, otherwise expenditure reductions would be required.