Godongwana expected to cut 2026 growth forecast

Finance Minister Enoch Godongwana predicted in February 2026 that South Africa’s economy would grow by 1.6% in 2026. The forecast followed GDP growth of 1.1% in 2025.

Budget Execution Under Scrutiny

Expenditure reached 42% of the budget during the first five months of the 2026/27 financial year, slightly above the five-twelfths share of 41.7% that would represent an even pace of spending across the year.

Revenue totalled R812bn over the same period, equivalent to 39% of the main budget’s R2.082-trillion full-year target. Five-twelfths of the annual target amounts to R868bn, leaving collections R56bn below that proportionate benchmark.

Annabel Bishop, an Investec economist, said: “The outcome for the current financial year to date shows revenue at R812bn for the first five months of 2026/27, versus main budget revenue for the year at [R2.082-trillion], and five-twelfths of this [equals] R868bn, which means the first five months are below budget”.

Fuel Pushes Inflation Higher

Absa economists predicted September consumer inflation would rise by 0.2 percentage points to 4.6%, with higher fuel prices adding directly to the headline rate. The forecast by Miyelani Maluleke and Lebo Siboyi implied an increase from 4.4% in August.

“We calculated the weighted fuel CPI to have risen 6.2% month on month in September based on the announced fuel price changes, pushing the year-on-year inflation rate in this category to 27.8% from 20% in August. This would lift the direct contribution of fuel prices to headline CPI inflation by 0.3 percentage points in September,” Miyelani Maluleke and Lebo Siboyi said.

Their estimates indicated that fuel would account for more of the inflation experienced by households in September, following the month-on-month increase in the weighted fuel CPI. Food and nonalcoholic beverages were also expected to contribute to the rise, although at a lower inflation rate than fuel.

“We expect food and nonalcoholic beverages inflation to have edged higher by 0.2 percentage points to 1.3%, partly reflecting base effects,” Miyelani Maluleke and Lebo Siboyi said. That projection implied the category’s inflation rate had been 1.1% previously.

The South African Chamber of Commerce and Industry will release its September business confidence index on 19 October.