South African Cabinet Endorses 2025 MTBPS Amidst Strong Q3 Job Creation and Tourism Growth

Cabinet Approves 2025 Medium-Term Budget Policy Statement

The South African Cabinet has officially endorsed the 2025 Medium-Term Budget Policy Statement (MTBPS), presented by Finance Minister Enoch Godongwana on November 12, 2025. This pivotal statement outlines a refined economic strategy for the nation, focusing on fiscal stability and sustainable growth. A key feature of the MTBPS is the introduction of a more focused inflation target of 3%, a significant adjustment and the first in 25 years. This move aims to enhance price stability, safeguard household purchasing power, and foster a more attractive investment climate. The government has also reaffirmed its dedication to bolstering essential public services, including healthcare, education, and social protection, while accelerating investments in critical infrastructure such as energy, water, and transport. The MTBPS projects a reduction in the consolidated budget deficit from 4.7% of GDP in 2025/26 to 2.9% by 2028/29, with government debt expected to stabilize at 77.9% of GDP in 2025/26, marking a crucial milestone since the 2008 financial crisis.

Significant Job Creation Boosts Employment Figures

South Africa's labor market demonstrated encouraging growth in the third quarter of 2025, with the latest Quarterly Labour Force Survey (QLFS) reporting the creation of 248,000 new jobs. This surge has increased the total number of employed persons to 17.1 million, leading to a 1.3 percentage point decline in the official unemployment rate, which now stands at 31.9%—the lowest since late 2024. The construction sector led job creation with 130,000 new positions, followed by community and social services with 116,000 additions, and trade with 108,000 new jobs. Notably, the Western Cape province emerged as a frontrunner in job creation, adding 70,000 jobs and achieving the lowest provincial unemployment rate of 19.7%.

Tourism Sector Experiences Robust Growth

The country's tourism sector recorded a strong performance in the third quarter of 2025, with overseas tourist arrivals surging by 24% year-on-year, according to Statistics South Africa. Between January and September 2025, total international tourist arrivals reached over 7.6 million, surpassing the 2019 benchmark by approximately 73,000 visitors. This robust growth was significantly driven by increased arrivals from Europe, which saw 280,322 visitors (up 21.7%), and North America, contributing 122,557 arrivals (up 18.4%). Factors contributing to this positive trend include improved flight connectivity, favorable exchange rates, targeted marketing campaigns, and the successful hosting of major international conferences. The tourism rebound is recognized as a vital economic pillar, contributing substantially to GDP growth, foreign exchange earnings, and employment generation across the nation.

Overall Economic Expansion Continues

The South African economy expanded by 0.5% quarter-on-quarter in Q3 2025, marking its fourth consecutive quarter of growth. On a year-on-year basis, the Gross Domestic Product (GDP) surged by 2.1%. This sustained economic expansion was primarily fueled by strong performances in key sectors, particularly mining and tourism, signaling a resilient recovery amidst ongoing global and domestic challenges. The government's commitment to structural reforms and strategic investments outlined in the MTBPS aims to further support this growth trajectory, with an average economic growth of 1.8% projected over the medium term.