South Africa has reached a historic financial milestone, with its debt projected to peak at 78.9% of GDP this year, marking the end of a nearly two-decade upward climb. In a buoyant budget speech, Finance Minister Enoch Godongwana announced that debt will stabilize this fiscal year and then begin its long-awaited decline. The improved fiscal health gives the government room to scrap a planned tax hike and adjust income brackets for inflation, putting money back in citizens’ pockets. The turnaround stems from a commodities boom, spending restraint, and a shift in focus from consumption to infrastructure investment. Meanwhile, investors have responded enthusiastically to the news: the rand strengthened, bond yields fell below 8%, and the FTSE/JSE Africa All Share Index hit a record high.
Bloomberg
