South African Finance Minister Enoch Godongwana announced on Wednesday, 12 November 2025, a revised inflation target of 3 percent with a 1-percentage-point tolerance band, during the Medium-Term Budget Policy Statement in Parliament.
The tolerance band is intended to provide flexibility against unexpected inflationary shocks. The new target, agreed upon with the Governor of the South African Reserve Bank, the President, and Cabinet, replaces the previous range of 3–6 percent and will be phased in over the next two years. Godongwana acknowledged that while lower short-term nominal GDP and revenue growth may make fiscal targets harder to achieve, the long-term benefits outweigh these costs.
The minister also highlighted that government debt is projected to stabilise at 77.9 percent of GDP in 2025/26, marking the first time since the 2008 financial crisis that public debt will not rise as a proportion of GDP. Domestically, real GDP growth is forecast at 1.2 percent for 2025, more than double that of 2024, and expected to average 1.8 percent between 2026 and 2028. Godongwana emphasised that structural reforms in energy and logistics, alongside macroeconomic stability, state capability building, and growth-enhancing infrastructure, will underpin South Africa’s strategy for faster, sustainable economic growth amid global challenges, including rising protectionism and delayed effects of US tariffs.