The upward revision of South Africa’s gross domestic product (GDP), following a regular recalculation of how the economy is measured, creates fiscal headroom for the country, Finance Minister Enoch Godongwana said on Friday evening.
Official data released on Thursday showed the country’s GDP was 5.3% larger in 2025 than previously estimated, after a rebasing exercise that is typically conducted every five years. Analysts said this could reduce the country’s gross debt ratio for the current fiscal year from 78.2% to an estimated 74.5% of GDP.
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“I can confirm that, it definitely gives us headroom,” Godongwana said in an interview on the side of a forum hosted by the Kgalema Motlanthe Foundation.
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“I need to allow my team to do the normal forecasting in terms of what it means, both in revenue and for the fiscal metrics – and then we can have a long-term view,” Godongwana said.
Moody’s and other rating agencies have flagged improvements in the country’s debt position as a factor they will watch when considering further upgrades to the country’s credit rating, which has been on an upward trajectory but remains below investment grade.
Godongwana cautioned that the statistical windfall is unlikely to unleash funding for much-needed infrastructure development.
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“The current problem on infrastructure is the ability to spend. Even now I’ve made a provision that is not likely to be spent.”
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Godongwana said the nature of the GDP revision, part of which was driven by the inclusion of the contribution made by illegal mining, would be particularly hard to capture for the benefit of public finances.
“It’s going to be a task, particularly on the informal side, a hell of a task,” he said.
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