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IMF Raises South Africa’s 2025 Growth Forecast to 1.1%
IMF upgrades SA’s growth forecast for 2025
South Africa’s economy is finally getting a small dose of good news. The International Monetary Fund (IMF) has lifted its 2025 growth forecast for the country from 1.0% to 1.1%, signalling a rare moment of optimism after a year of sluggish performance.
The IMF’s October World Economic Outlook update shows that global growth will also tick slightly higher, now expected at 3.2% in 2025, compared to 3% in July. The group kept its 2026 global outlook steady at 3.1%, pointing to a mild slowdown after a stronger 2024.
For South Africa, this improvement follows a surprising second-quarter rebound. GDP grew by 0.8% quarter-on-quarter, driven by a strong agricultural season and better-than-expected exports.
Why the upgrade matters
The IMF’s change aligns with local forecasts from Investec and Bloomberg, which were also recently raised to 1.1%. It’s a sign that the economy, despite persistent challenges, is showing short-term resilience.
Part of that resilience stems from global trade delays. US universal tariffs were postponed several times during 2025, which allowed South African exports to avoid new taxes for most of the year. This temporary relief gave local manufacturers and the rand a brief window of breathing room.
Investec’s Chief Economist Annabel Bishop noted that the delay helped lift South Africa’s outlook, as most exports to the US “avoided this tax for most of the year.”
But tougher times are coming
The optimism, however, is short-lived. The IMF expects South Africa’s growth to slow to 1.2% in 2026, citing weaker global demand and ongoing trade pressures from the US.
Local economists share that caution. Both Investec and Bloomberg have trimmed their 2026 forecasts slightly, warning that the true impact of global protectionism will hit next year. Lower demand for commodities and manufacturing slowdowns are already weighing on export sentiment.
According to Bishop, declining prices for most raw materials, aside from precious metals, have started to suppress industrial output and confidence.
IMF’s message to policymakers
The IMF urged governments, including South Africa’s, to rebuild fiscal buffers and restore confidence through credible and transparent policies. It warned that sustainable growth will depend on improved logistics, a stable electricity supply, and renewed investor trust.
While the upward revision for 2025 is encouraging, South Africa’s long-term growth story still hangs in the balance. The next year will test whether the country can turn small economic gains into something lasting.
For now, the outlook is brighter, but not blinding.
Also read: Relief at the Pumps: Oil Prices Tumble, Petrol Cuts on the Horizon
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Source: Business Tech
Featured Image: GCIS (UK)
