South Africa: SA Remains On Track to Meet Fiscal Targets, Says Treasury DG

South Africa remains on course to meet its fiscal targets despite the economic uncertainty created by the recent conflict in the Middle East, National Treasury Director-General Duncan Pieterse said on Monday.

Speaking at the Citi Emerging Markets Macro and Credit Conference, Pieterse said the country's public finances had reached a turning point following the February 2026 Budget, which saw government debt stabilise relative to GDP for the first time since before the 2008 global financial crisis.

He said South Africa had also achieved a third consecutive primary budget surplus, demonstrating government's ability to meet both its fiscal consolidation targets and structural reform commitments.

"The true test of fiscal credibility is to deliver on our fiscal objectives through the cycle, including in times of stress," Pieterse said.

Pieterse said recent assessments by major credit rating agencies had reinforced confidence in South Africa's fiscal trajectory.

Moody's recently revised South Africa's outlook to positive, while S&P Global Ratings reaffirmed its positive outlook after upgrading the country's sovereign rating in November 2025.

According to Pieterse, both agencies expect South Africa's debt burden to decline over the next three years while structural reforms continue to support economic growth.

He noted that South Africa is currently the only G20 country with a positive outlook from Moody's and one of only two G20 countries with a positive outlook from S&P.

Treasury reported stronger-than-expected fiscal outcomes for the 2025/26 financial year. The primary surplus reached 1.1% of GDP, exceeding the Budget estimate of 0.9%, while the main budget deficit narrowed to 4.3% of GDP compared with the projected 4.6%.

Government debt is expected to decline over the medium term, while the main budget deficit is forecast to fall to 3.1% by 2029.

Pieterse said government would introduce a formal fiscal rule during the Medium-Term Budget Policy Statement in October to reinforce its debt reduction and primary surplus objectives.

In response to rising fuel prices linked to the Middle East conflict, government introduced temporary fuel levy relief from April to June at a cost of R17.2 billion.

Pieterse said the measure would be funded from fiscal outperformance recorded in the previous financial year and would therefore be fiscally neutral.

He added that any additional relief measures would be accommodated within existing departmental budgets.

Treasury also reported continued revenue strength at the start of the new financial year. Tax collections i