South Africa’s National Treasury announced on Thursday that a revision to Gross Domestic Product data has improved the country’s key public finance indicators, including the ratio of government debt to the size of the economy.

The updated economic estimates, released last week by Statistics South Africa (Stats SA), showed that the South African economy is approximately 5% larger than previously calculated.

According to a Treasury statement, public debt peaked at the equivalent of 74.6% of GDP in the 2025-26 fiscal year, below the 78.4% presented in the medium-term budget review published in October. The difference stems from the upward revision to the size of the economy, which reduces the relative weight of debt as a share of GDP without necessarily reflecting a reduction in the actual amount owed by the state.

The revision also affected projections for the budget deficit — the gap between government expenditure and revenue. For the 2026-27 fiscal year, the government now projects a deficit equivalent to 3.5% of GDP, compared with the 3.7% previously estimated in the medium-term budget assessment.

On the primary balance, which measures the difference between government revenue and expenditure excluding interest payments on debt, the Treasury projects a surplus of 1.6% of GDP in 2026-27. That indicator is expected to rise gradually, reaching 2.8% of GDP in the 2029-30 fiscal year, according to official projections.

National Treasury Director-General Duncan Pieterse clarified that the changes to the forecasts result essentially from a statistical adjustment rather than shifts in fiscal policy. He nevertheless said the new indicators demonstrate that the government ‘continues to meet its fiscal targets’ and is benefiting from lower borrowing costs.

The GDP revision therefore improves the reading of South Africa’s public finance sustainability indicators by presenting a more favourable relationship between debt, the deficit, and the size of the economy. However, the statistical adjustment does not in itself mean the country has reduced the nominal value of its public debt or increased state revenues.

Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=559018