National Treasury says South Africa’s debt-to-GDP ratio peaked at 74.6% in 2025/26, and that it now projects that the debt-to-GDP ratio will fall below 70% by 2032/33, which is one year earlier than forecast in the October 21 Medium Term Budget Policy Statement (MTBPS).

Treasury recalculated South Africa’s fiscal metrics after Statistics South Africa (Stats SA) on October 29 updated the reference, or base, year used to calculate GDP in constant currency terms from 2015 to 2022.

Treasury says the newly calculated primary surplus is 1.6% of GDP in 2026/27, compared with the 1.7% presented in the MTBPS. This primary surplus is now expected to rise to 2.8% in 2029/30, compared with the 2.9% by 2029/30 stated in the MTBPS.

Similarly, the 2026/27 main budget deficit has been recalculated at 3.5% of GDP, compared with the 3.7% presented in the MTBPS.

“National Treasury has not revised the assumptions it used in its MTBPS estimates, nor changed revenue, spending or debt estimates. The 2027 Budget will provide more detail and update the full macroeconomic forecast and fiscal framework,” it says.

The 2026 benchmarking had the effect of increasing the level of nominal GDP by 5.1%, or R393-billion, for 2025/26 and by a yearly average of R294-billion for the period 2018/19 to 2025/26.

The effect shrank all the fiscal ratios that use nominal GDP as the denominator, Treasury says.

On average, the consolidated budget deficit improves by 0.2 percentage points of GDP for the current fiscal year and over the medium term. The main budget primary surplus is revised down by an average of 0.1 percentage points over the medium term.

Additionally, debt service costs fall to a medium-term average of 5.1%, compared to the 5.4% estimated in the MTBPS.

The rebasing also led to expectations that the tax-to-GDP ratio would decrease by an average of 1.3 percentage points over the medium term, Treasury says.

“Our updated calculations confirm that government continues to achieve its fiscal targets, with the fiscal metrics looking even better than we had projected based on Statistics South Africa’s revised GDP data.

“We are restoring fiscal credibility and South Africa is seeing the benefits in lower borrowing costs and a stronger foundation for investment and growth,” says Treasury director-general Duncan Pieterse.

The benchmarking exercise uses improved data and methods to ensure that major changes in the economy’s structure are incorporated into GDP calculations, so that these more accurately reflect the size and composition of the economy.

Historically, Stats SA’s five-yearly benchmarking exercises have often increased the estimated size of the economy, or the absolute level of GDP, but have seldom impacted estimations of economic growth rates meaningfully, Treasury notes.