2026 National Budget Review
- 26 February 2026
- 2 min read
In its 2026 National Budget, National Treasury struck a more conservative tone, prioritising fiscal sustainability amid a modestly improved growth outlook and continued pressure on the revenue base.
While the Budget signals progress on debt stabilisation and a commitment to fiscal discipline, it also highlights the limited fiscal space available to support discretionary spending over the medium term.
In this review, Futuregrowth’s Interest Rates team unpacks the key fiscal, debt and market implications of Budget 2026, assessing what the updated projections mean for government borrowing, bond issuance, and South Africa’s medium‑term fiscal trajectory.
Key takeaways:
Fiscal consolidation remains intact, but cautious:
Debt is projected to peak in FY2025/26 and stabilise thereafter, marking an important inflection point - albeit with limited room for policy slippage.
Growth and revenue assumptions are conservative:
Treasury’s modest growth revisions and prudent revenue forecasts reduce downside risk, but constrain near‑term fiscal flexibility.
Infrastructure prioritised within tight fiscal space:
Planned infrastructure spend is the fastest‑growing expenditure category, though high fixed costs continue to limit discretionary capacity.
Read: Budget 2026: From fiscal sustainability to infrastructure bankability
Debt dynamics and issuance supportive for markets - for now:
Lower bond issuance and easing debt‑service costs have been well received, but refinancing risks increase later in the decade.
Structural risks persist:
SOE reform and a highly concentrated tax base remain key vulnerabilities to the medium‑term fiscal outlook.
Read the full Budget 2026 analysis from Futuregrowth’s Interest Rates team here.
