Finance Minister Enoch Godongwana tables the 2026 Medium-Term Budget Policy Statement in Parliament at 14:00 on Wednesday, 21 October, and the economy he reports on has weakened since the February budget.

The Reserve Bank says gross domestic product contracted by 0.2% in the second quarter. It raised the repo rate by 25 basis points to 7.25% in September and expects inflation to climb above 5% later this year. Fuel prices rose again on 7 October, with petrol 95 up 333 cents a litre.

The statement is the government's mid-year update on growth, tax collection and spending. New tax rates are normally announced in the February Budget, not in October.

The economy Treasury is reporting on

The Reserve Bank's Monetary Policy Committee voted unanimously to lift the repo rate to 7.25% in September. The bank puts current inflation at 4.4%, expects it above 5% later this year and early next year, and sees it returning to the 3% target towards the end of 2027.

It cut its 2026 growth forecast to 1.2% from 1.4%, with medium-term growth near 2%. The second-quarter contraction followed a first quarter in which output grew 0.5% on the previous quarter, according to figures cited in June.

In June, Godongwana said Treasury was reassessing its baseline forecasts, which then projected growth of 1.6% in 2026, 1.8% over the medium term and 2% by 2028. Economist Sanisha Packirisamy of Momentum Investments said then that a downward revision was warranted, and Investec economist Annabel Bishop trimmed her 2026 forecast to 1.3% from 1.5%. Those views predate the second-quarter contraction.

The fuel shock

The Department of Mineral and Petroleum Resources announced adjustments effective 7 October: petrol 93 up 312 cents a litre, petrol 95 up 333 cents and 0.005% sulphur diesel up 324.38 cents. The department said the average Brent crude price rose from US$87.89 to US$101 a barrel, which it attributed to US-Iran tensions, uncertainty over oil flows through the Strait of Hormuz and falling inventories.

Pre-announcement estimates put the 95 petrol price near R30.21 a litre, against a previous peak of R28.06 in June, but the official statement gave increases only, so the pump price should be confirmed before quoting.

The South African Institute of Taxation said the temporary fuel levy relief between April and June cost about R17.2 billion in forgone revenue, and argued that February's budget was “written for a world that no longer exists”. That figure comes from one source.

What to watch on the day

Godongwana delivers the statement in the Good Hope Chamber in Cape Town, and also tables the Adjustments Appropriation Bill. It is broadcast live on Parliament's channels. Documents appear on the National Treasury website once tabled.

The numbers to check are Treasury's growth forecast against the Reserve Bank's 1.2%, tax revenue against February's estimates, debt and deficit projections, and any change to spending over the next three years. The Reserve Bank's next rate decision is on 19 November.

What we do not yet know

  • Treasury's updated growth, revenue and deficit forecasts; none have been published.
  • Whether support for households or fuel levy relief will be announced; no source says so.
  • The official pump price of 95 petrol after the 7 October adjustment.
  • Whether the Reserve Bank has raised rates twice this year, as one institute says; we could confirm only the September increase.
  • The Stats SA release date for September inflation; not confirmed in sources reviewed.