South Africa’s debt ratio is lower than first thought, the National Treasury said on Thursday. New data showed the economy was 5.3% bigger last year than earlier estimates.
The Treasury said debt as a share of gross domestic product (GDP) peaked at 74.6% in 2025-26. The 2026 Medium Term Budget Policy Statement had put that figure at 78.4%.
“Our updated calculations confirm that government continues to achieve its fiscal targets, with the fiscal metrics looking even better than we had projected,” Treasury Director-General Duncan Pieterse said in a statement.
Pieterse said the country was restoring fiscal credibility. He said South Africa was seeing the benefits in lower borrowing costs and a stronger base for investment and growth.
The change follows new numbers from Statistics South Africa. Stats SA said last week that GDP at current prices was R8 trillion last year, or about $489 billion. It had earlier reported R7.6 trillion.
The bigger figure came after Stats SA moved the base year it uses to measure the economy to 2022. This kind of update, called rebasing, is usually done every five years to reflect big changes in how the economy is built.
The Treasury said other main fiscal ratios had also become smaller. It said the main budget deficit for 2026-27 was 3.5% of GDP, compared with the earlier estimate of 3.7%.
According to the Treasury, the primary surplus was 1.6% of GDP in 2026-27. The midterm budget last month had projected 1.7%. The Treasury said this surplus would rise to 2.8% in 2029-30.
The Treasury said the change was a “mechanical” revision based on the new numbers. It said it had not changed the assumptions behind its budget estimates. It also had not changed its revenue, spending or debt estimates.
Analysts said the better numbers could help South Africa’s credit rating. Ratings companies watch these figures closely.
Moody’s Ratings suggested this month that an upgrade may be under consideration. This came after the government kept debt steady as a share of GDP.
South Africa’s rating was cut to junk status in 2017, during large deficits under former President Jacob Zuma. It has been moving up since then, but it is still two steps below investment grade.
Not everyone sees the change as a sign of a stronger economy. Jee-A van der Linde, a senior economist at Oxford Economics, said a bigger economy on paper lowers the debt ratio, but “it does not improve the real economic growth needed to create additional employment.”
“We still expect GDP growth to remain subdued, around 1% this year and next,” Van der Linde wrote in a note to clients.
Source: this article is based on reporting by Moneyweb. Image: Moneyweb. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.