Budget 2026: GDP expected to grow slightly – but not enough for meaningful change

Minister of Finance Enoch Godongwana delivering the 2026 Budget Speech. Picture: Phando Jikelo / RSA Parliament Finance Minister Enoch Godongwana delivered the 2026 Budget Speech with some optimism about South Africa’s continued economic growth. However, National Treasury has noted that the growth will not bring any meaningful change.

He is speaking at the Nieuwmeester Dome in Cape Town on Wednesday. The minister noted that the country’s economy is “steadily improving”, with growth projected at some 1.6% in 2026, following 1.4% in 2025. “We project real economic growth of 1.6% in 2026, an improvement from the 1.4% estimated in 2025,” he said.

Godongwana highlighted several risks that could threaten the country’s economic outlook. “Over the medium term, growth is expected to average 1.8%, reaching 2% by 2028,” he said. “Persistent logistics bottlenecks, weak public infrastructure and the recent outbreak of foot-and-mouth disease continue to weigh on economic activity and pose risks to the outlook.” Godongwana highlighted that the only long-term solution is to grow the economy quickly in a way that benefits everyone.

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A National Treasury document noted that growth remains well below levels needed to meaningfully reduce unemployment and generate sufficient revenue to expand social and economic services. The department expects critical reforms to increase gross domestic product (GDP) growth, improve government efficiency, and scale up public investment to add momentum to the economic recovery. Treasury’s growth strategy focuses on maintaining macroeconomic stability, implementing structural reforms, boosting state capability, and raising the level of public infrastructure investment.

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