A revenue shortfall of roughly R56bn over the first five months of the fiscal year is the number investors will be watching when finance minister Enoch Godongwana tables the medium-term budget policy statement in parliament on Wednesday. The fiscal stakes are rising as fallout from the US conflict with Iran ripples through the economy, and the minister is widely expected to lower his growth forecast for 2026, a revision that will shape expectations for revenue collection and expenditure discipline in the current fiscal year.
The February main budget, delivered just before the conflict erupted, projected growth of 1.6% in 2026, an improvement on what was then an estimated 1.4% expansion for the prior year. The actual outcome came in lower still, at 1.1%. Since then, both the South African Reserve Bank and the IMF have cut their forecasts significantly, and Godongwana is likely to follow suit on Wednesday. For market-watchers, the direction of that revision will signal how far the Treasury sees the war’s damage to key sectors such as manufacturing and mining, and the sharp rise in inflation, eating into the tax base.
The spending side is already under pressure. Expenditure for the first five months of 2026/27 stands at 42% of the budget, against 41% at the same point last year. Revenue looks weaker still. “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,” said Investec economist Annabel Bishop. A shortfall of that size, if it persists, will sharpen attention on how the minister proposes to close the gap without unsettling debt markets.
Before the fiscal spotlight turns to parliament, the corporate sentiment gauge arrives first. The South African Chamber of Commerce and Industry will release its September business confidence index on Monday. In its previous survey, published in August, the chamber reported that confidence had edged higher in July, supported by strong new-vehicle sales, merchandise export volumes and lower energy prices, though higher inflation and lower global precious-metal prices dampened sentiment somewhat. The chamber also warned that South Africa’s economic outlook remained vulnerable to the consequences of the Middle East war, which has disrupted the flow of oil and other commodities through the Strait of Hormuz, a risk with direct consequences for trade-dependent businesses and import costs.
Monday also brings a global financial-stability angle. The Bank for International Settlements will publish a paper titled “Central banks and macro-financial stability in a fragmented global economy” as part of its 25th annual conference programme. In June the BIS warned that the supply crisis in energy and other raw materials posed a threat to the global economic outlook, urging policymakers to prioritise price stability, strengthen financial stability and ensure sound monetary and fiscal foundations to secure sustainable growth.
Tuesday belongs to the payments sector. The South African Reserve Bank will open a two-day conference, addressed by governor Lesetja Kganyago, bringing together leaders, policymakers, regulators and innovators from across the payment ecosystem to shape the future of payments in South Africa and beyond. The same day, the South African Freight and Logistics Association will launch its Gauteng region branch, with Ian Bird from lobby group Business for South Africa delivering the keynote speech on “Business-Government Partnership: Tracking Logistics Reforms”, a theme closely watched by operators betting on logistics reform to lower the cost of doing business.
The data calendar peaks on Wednesday, when Stats SA publishes September consumer inflation. Absa economists Miyelani Maluleke and Lebo Siboyi expect a 0.2 percentage point uptick to 4.6% in the headline number on fuel price pressure. “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,” they said. They also expect food and nonalcoholic beverages inflation to have edged up 0.2 percentage points to 1.3%, partly reflecting base effects.
Later the same day, Stats SA’s release of August retail sales will offer a key read on the strength of consumer spending in the third quarter, with recent numbers suggesting tentative resilience despite the inflationary squeeze from fuel prices. For businesses and investors alike, the combination of a trimmed growth outlook, below-budget revenue and rising consumer prices sets the tone for the fiscal choices ahead, and the question is whether Godongwana can close the gap without spooking the bond market.