Economists and policy experts attending the North-West University (NWU) Business School Pitso on the 2025 Medium-Term Budget Policy Statement (MTBPS) commended the disciplined fiscal stance and renewed transparency of the government, but cautioned that the benefits of the new inflation target and spending reforms will take time to materialise.
The online discussion, moderated by economist Khaya Sithole, brought together leading voices, including Prof. Raymond Parsons, economist at the NWU Business School, Dr Azar Jammine, director at Econometrix, and Sikhonathi Mantshantsha, an award-winning journalist, policy analyst and commentator.
The Pitso explored the fiscal direction set out by Finance Minister Enoch Godongwana, whose budget introduced a reduced inflation target of 3% (±1%), tighter fiscal controls and efforts to restore confidence in public finances.
While analysts welcomed the lower inflation target as a step towards aligning South Africa with global best practices, they warned that the economic benefits will not be immediate.
Prof. Parsons stressed that policy consistency and credibility will be critical in realising these benefits. “The government must avoid policy reversals,” he said. “Consistency is key to restoring investor confidence and ensuring sustainable recovery.”
Speakers commended the government’s efforts to improve transparency in procurement and spending, as well as the decrease in interest debt costs reflected in the budget.
Mr Mantshantsha praised the Government of National Unity (GNU) for moving “beyond rhetoric” and working in closer collaboration with key stakeholders, including the Reserve Bank and the private sector. “Collaboration with the private sector shows that the government is heading in the right direction,” he said.
He noted that the increase in mining revenues could provide a temporary boost to the economy, easing fiscal pressure in the short term.
Dr Jammine warned that the MTBPS should not be seen as an immediate solution to South Africa’s economic stagnation. “The budget will not instantly boost the economy,” he said. “Challenges such as corruption, weak policy coordination, and structural inefficiencies continue to constrain growth.”
Dr Jammine added that the full picture of fiscal priorities will only become clearer in February, when the main budget is tabled.
Meanwhile, Prof. Parsons applauded the GNU for maintaining fiscal discipline ahead of the 2026 elections – a period when many countries succumb to populist spending pressures.
“The government deserves credit for taking a responsible fiscal approach,” he said. “This will support South Africa’s credit ratings and signal to investors that the country is serious about macroeconomic stability.”
He further praised the administration for emphasising tax collection and avoiding a “spending splurge”, noting that these measures demonstrate a maturing fiscal framework. However, Prof. Parsons cautioned that political pressures could intensify in the coming months. “As elections draw closer, there will be pressure to increase spending. The government must resist populist impulses,” he warned.
Looking ahead, Prof. Parsons urged policymakers to adopt a pragmatic, evidence-based approach rather than being swayed by ideological debates.
“The government must focus on what works,” he said. “We need pragmatic dialogue between the public and private sectors, driven by measurable outcomes rather than political rhetoric.”
He further called for a more ambitious finance minister and President, capable of driving the reform agenda with urgency and clarity.
The NWU Pitso concluded that, while the 2025 MTBPS reflects sound fiscal judgment and renewed transparency, its success will depend on implementation discipline, policy consistency and collaboration across all sectors of society.
As Dr Jammine noted, “We will only see the full impact of these policies over time – but this budget sets a tone of responsibility that South Africa urgently needs.”
