South Africa beating the UK in one key area
South Africa has a lower debt-to-gross domestic product (GDP) ratio than the UK, one of the world’s most developed economies.
Debt-to-GDP is a key economic indicator which measures the ratio between a government’s debt and its total economic output.
The number is commonly used by investors to evaluate a country’s financial health and ability to repay debts.
In South Africa’s recent Medium-Term Budget Policy Statement (MTBPS), Finance Minister Enoch Godongwana said the country’s debt-to-GDP ratio had stabilised at an estimated 78.4% in 2026.
From this mark, the government forecasts a gradual decline in its debt, aiming for 76.6% of GDP by 2029/2030.
Following the mini-budget, South Africa’s debt-to-GDP ratio was revised lower due to revisions to historical GDP calculations.
These revisions by Stats SA placed the peak government debt closer to 74.6%, according to the National Treasury.
“The debt-to-GDP ratio peaked at 74.6% in 2025-26, down from the 78.4% estimated in the 2026 Medium Term Budget Policy Statement,” the Treasury said in a statement at the time.
The change was due to the size of South Africa’s economy being revised upwards to an estimated R8 trillion last year, up from the previous estimate of roughly R7.6 trillion.
The GDP revision led to improvements in several economic indicators, which pointed to a strong fiscal performance for South Africa, according to Treasury Director-General Duncan Pieterse.
“Our updated calculations confirm that government continues to achieve its fiscal targets, with the fiscal metrics looking even better than we had projected,” he said.
In comparison, the UK’s debt-to-GDP ratio was 93.2% at the end of the 2026 financial year and was forecast to rise to 97.3% by the end of 2028/2029, according to the country’s Office for Budget Responsibility (OBR).
“The OBR forecasts that government debt will increase to 97.3% at the end of 2028/29. It will then fall to around 95.6% of GDP at the end of 2031/32,” the group said in a research briefing on 29 October 2026.
UK still on top
Despite its higher debt-to-GDP ratio, yields on UK government bonds are still significantly lower than those on South Africa’s government bonds.
For South Africa’s benchmark 2035 government bond, the yield was 8.365% on 10 November 2026, according to Reuters.
In comparison, the British financial company Hargreaves Lansdown reported a yield of 5.2% on UK 2035 government bonds on 11 November.
A higher government bond yield reflects less trust in the country’s ability to repay its debts, which is determined by the debt-to-GDP ratio.
However, this ratio is not the only indicator which affects bond yields, with a country’s investment rating playing an integral role.
Currently, the UK is considered investment grade by all three major ratings agencies: Moody’s, Standard & Poor’s (S&P), and Fitch.
On the other hand, South Africa is rated as “junk status” by the three groups, although the country’s economy has been given a positive outlook.
This credit rating warns investors that South African bonds carry a higher degree of risk, prompting them to demand higher returns.
In 2020, shortly after Moody’s downgraded South Africa’s rating, Investec provided an overview of how the country ended up in its situation.
It broadly attributed the downgrades to “slow economic growth and a weak GDP, political instability, turmoil in the mining sector and an overburdened Eskom.”
Currently, several economists forecast that South Africa is on the path towards regaining investment-grade status, particularly due to its current control over government debt levels.
The UK has maintained favourable credit ratings despite its higher debt-to-GDP ratio, owing to several factors, including its strong financial institutions and historical fiscal discipline, according to Jari Stehn, chief European economist at Goldman Sachs Research.
“The UK has strong fiscal institutions—in particular, the OBR scores very well compared to fiscal institutions in other countries,” he said in October 2025.
“It’s very independent, it has an important role to play, and there’s a lot of evidence that fiscal institutions like this help to achieve better fiscal outcomes.”
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