MTBPS preview: Spending pressures build
09 October 2026
Ahead of the 2026 MTBPS, spending is running above budget while revenue improves. Markets will watch debt, deficits and the fiscal anchor closely.
8 min read
Mid-term Budget Speech 2026
Finance Minister Enoch Godongwana will deliver the 2026 mini-Budget on Wednesday 21 October.
LISTEN: MTBPS 2026 | More revenue, less borrowing?
Stronger revenue offers an opportunity to reduce borrowing. Will spending pressures limit the gains? Ahead of the 2026 Medium-Term Budget Policy Statement (MTBPS), Investec’s Annabel Bishop and Tertia Jacobs to examine the choices facing National Treasury.
Higher precious metals prices offer the prospect of better-than-budgeted tax revenue. But weaker growth, inflation pressure and higher borrowing costs complicate the outlook. How Treasury uses any additional revenue will matter for debt sustainability and investor confidence.
In this episode of No Ordinary Wednesday, our economists discuss spending discipline, the proposed fiscal anchor and why rising bond yields do not necessarily signal weaker confidence in South Africa.
2026 Medium-Term Budget Policy Statement (MTBPS)
Date
Wedensday 21 October 2026
Time
14:00
Budget Speech 2026
Key Takeouts:
- Debt stabilisation: Government says debt will stabilise in 2025/26 for the first time in 17 years, with deficits and debt-service costs continuing to decline.
- Modest growth recovery: GDP growth is forecast at 1.6% in 2026, rising gradually to 2% by 2028, supported by reforms but still constrained by infrastructure and logistics.
- Tax relief enabled by revenue gains: Stronger tax collection allows the withdrawal of the proposed R20bn tax increase, inflation-linked PIT relief, higher savings limits and VAT threshold relief for small businesses.
- Infrastructure-led reform push: Over R1 trillion allocated to public infrastructure, alongside reforms in energy, logistics, municipalities and expanded public-private partnerships.
- Social spending protected: Social grants rise and the social wage remains prioritised, funded through targeted savings and efficiency measures rather than broad tax hikes.
Watch: Budget Speech 2026 preview
Listen: Budget 2026 | What’s at stake?
South Africa’s 2026 Budget arrives at a pivotal moment. Debt is hovering near 78% of GDP. Growth is forecast at just 1.5%. Debt-servicing costs absorb around 5% of GDP. And yet, bond yields have fallen, sentiment has improved and S&P maintains a positive outlook. Is this genuine fiscal stabilisation or simply a window of opportunity? Listen to Investec experts Chief Economist Annabel Bishop and Treasury Economist Tertia Jacobs unpack the upcoming budget.
In-depth analysis
A view from Investec's Chief Investment Strategist
Talking on his podcast, Macro Monday, Chris Holdsworth gave a short Budget Speech preview:
There are a couple of data points worth highlighting, for one, we think that total government revenue will be just a bit above the Medium Term Budget Policy Statement (MTBPS) forecast, which was about R20 billion above the budget last year, forecast.
So there's an extra R20 billion relative to the budget, and that means we don't expect to see the same sort of fight around the VAT increase that we saw last year.
The second point to look at is when debt-to-GDP peaks. Now in the MTBPS forecast, debt-to-GDP was due to peak around now, and even if that gets pushed out a little, by say six months or so, and it's expected to peak in the next year., we think that would still be a very encouraging development for rating agencies.
Should it be the case that the Treasury or Finance Minister presents a trajectory which sees that debt-to-GDP has either peaked already or is going to peak in the very near term, that would still allow scope for further rating upgrades by the backend of the year.
This page will be updated with analysis as the Budget Speech unfolds.
Investec’s Budget experts
Annabel Bishop, Chief Economist
Tertia Jacobs, Treasury Economist
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Explore more:
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In this Business Talk with Michael Avery interview, Tertia Jacobs, Investec Treasury Economist, discusses South Africa’s 2025 budget and the prospect of a R58 billion shortfall.
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