Macroeconomic ResearchThe 2026 Medium-Term Budget Policy Statement (MTBPS) brings welcome relief for consumers, with further temporary fuel levy relief announced for November and December. The MTBPS is also positive for investors and the credit rating agencies, insofar as it reiterates the commitment to restoring SA’s fiscal sustainability; there might ultimately be further positive rating action. In recent years, Treasury was focussed on restoring fiscal credibility and sustainability – in other words, stabilising government’s debt. The focus is now shifting to clearly prioritising economic growth.

Fiscal revenues were higher than expected, partly owing to the boost to mining company earnings from higher commodity prices. This revenue windfall used to a large extent to spend more on infrastructure, which Treasury believes should boost growth and employment.Furthermore, it is very encouraging to see the range of interventions being implemented to improve municipal finances and services. It will, by nature, take time for these reforms to have a visible impact, but at least constructive policy interventions are gaining momentum.