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South Africa\u2019s finance minister is unlikely to formally adopt a fiscal anchor in this week\u2019s budget, opting to wait until at least October to introduce the rule aimed at curbing public debt, according to a Bloomberg poll.<\/p>\n
Enoch Godongwana pledged in November that he would finalise a proposal for a fiscal anchor this year, a step seen as crucial to putting South Africa\u2019s debt-to-gross domestic product ratio on a sustained downward path. The metric is projected to peak in the current fiscal year.<\/p>\n
Since 2021, the government has targeted a primary budget surplus \u2013 where revenue exceeds non-interest spending \u2013 and is on track to post a third consecutive positive balance this year, underscoring its push to restore fiscal credibility.<\/p>\n
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BofA, StanChart see upgrade to SA outlook after budget
Why SA needs a fiscal rule to manage debt<\/p>\n
The National Treasury is likely to adopt a new debt rule \u201clater this year or in 2027,\u201d probably in the form of a legislated fiscal framework rather than a strict numerical target, Citigroup economist Gina Schoeman said.<\/p>\n
She\u2019s among seven of nine economists in a Bloomberg survey who reckon Godongwana won\u2019t formally announce the new framework when he delivers his budget speech at 2 p.m. on Wednesday.<\/p>\n
The minister is more likely to provide updated guidance on plans for adopting a fiscal anchor, Goldman Sachs Group economist Andrew Matheny wrote in a note. \u201cHowever, the messaging is at this stage likely to be general and to fall short of a formal announcement,\u201d with the latter possibly coming at the minister\u2019s mid-term budget update expected in October, he said.<\/p>\n
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Options for the anchor include a headline deficit limit, a primary balance target, or a debt-to-GDP ceiling, Tatonga Rusike, an economist at Bank of America, said. \u201cA credible fiscal rule could lead to lower bond yields, improve creditworthiness and reduce South Africa\u2019s risk premium.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
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