> ## Content Index
> Fetch the complete content index at: https://www.businessbagel.com/llms.txt
> Use this file to discover other available public pages before exploring further.

# South Africa's growth forecast is about to be cut, and Moody's still has an upgrade on the table
- URL: https://www.businessbagel.com/sa-growth-forecast-cut-mtbps-moodys-upgrade-mining/
- Published: 2026-10-15T03:45:00.000Z
- Updated: 2026-10-15T03:44:59.000Z
- Description: The IMF expects 1% growth this year against Treasury's 1.6%, and next Wednesday's mini-budget will show how much of the tax take still rests on gold and platinum prices.
- Author: Christian Maidman
- Tags: Economy, Business Bagel News

South Africa's economy shrank 0.2% between April and June, and the jump in fuel prices since April is a big part of why. In February, Treasury built its budget on 1.6% growth for the year. The International Monetary Fund now expects 1%, and among the emerging economies it compares South Africa with, only Saudi Arabia and Russia are expected to do worse.

Finance Minister Enoch Godongwana delivers his mini-budget on 21 October, and he is expected to cut his own forecast. The slower growth he has to plan around is already showing in jobs: unemployment rose to 33.6% in the second quarter, its highest in four years.

## How growth reaches the debt

Growth matters to the budget in two ways, according to Moody's, the credit rating agency. A bigger economy widens the base SARS collects tax from, and it makes the same debt a smaller share of the economy. That second part is what an upgrade hangs on: Moody's wants to see a credible, material fall in the debt burden. By its broad measure, which counts most guarantees to state-owned companies, debt peaked at about 87% of GDP in the 2025/26 financial year and should ease to 84% by 2030.

Moody's rates South Africa Ba2, below investment grade, with a positive outlook, which means an improvement is more likely than a cut. "We could upgrade South Africa's rating if fiscal performance continues to improve," Evan Wohlmann, a vice-president at Moody's, told a virtual media briefing on Tuesday. Historically, about 60% of the countries it has put on a positive outlook have eventually been upgraded.

The books have earned that much. Tax collections have run ahead of budget, mainly on company tax, helped by gold and platinum earnings. Treasury has run three primary surpluses in a row, collecting more than it spends before interest, and expects a fourth worth about R131 billion this year.

## The mines behind the revenue are shrinking

Stats SA's mining figures, out the same day as the IMF forecast, point the other way. Mining production fell 12.7% in August from a year earlier, with platinum group metals down by more than a fifth. Measured in rand, what the mines sold fell 15.1%, and gold sales almost halved.

Prices have done the carrying so far. Precious metal prices have come under some pressure in recent months but are still higher than a year ago, Daily Investor reports. PwC says years without real investment have kept mining output under pressure, so the industry cannot fully cash in on high prices. That leaves part of the tax take resting on prices nobody in Pretoria sets, while the volume underneath them falls.

Moody's says the mini-budget will show it how revenue is performing and how far commodity prices are holding it up. Moody's has also warned that, on past form, a lost investment-grade rating takes about twice as long to win back as it took to lose. South Africa lost it in 2020, eight years after Moody's first downgrade.