South Africa: fiscal consolidation remains on track

South Africa’s finance minister announced in today’s Medium-Term Budget Policy Statement (MTBPS) that the revenue windfall had persisted, allowing him to cover higher debt servicing costs and lift non-interest spending. As a result, fiscal consolidation plans remain on track, with the debt-to-GDP ratio still set to decline over the coming years. However, the long-anticipated fiscal anchor was underwhelming, while South Africa’s debt dynamics remain vulnerable to weaker metals prices and political risks.