{"id":840263,"date":"2025-10-17T13:30:00","date_gmt":"2025-10-17T11:30:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=840263"},"modified":"2025-10-17T13:11:28","modified_gmt":"2025-10-17T11:11:28","slug":"positive-turn-for-south-africa","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/840263\/positive-turn-for-south-africa\/","title":{"rendered":"Bright turn for South Africa comes with a big catch"},"content":{"rendered":"\n

The International Monetary Fund has published its October update to its World Economic Outlook report, which shows a more optimistic forecast for GDP growth in South Africa.<\/p>\n\n\n\n

In its latest review, the agency revised its global growth forecast to 3.2% for 2025, slightly higher than the 3% projected in July, while the 2026 estimate remained unchanged at 3.1%.<\/p>\n\n\n\n

These forecasts signal a mild slowdown from 3.3% in 2024.<\/p>\n\n\n\n

The global financier has also raised South Africa’s GDP expectations from 1% to 1.1%, marking a positive turn for the economy.<\/p>\n\n\n\n

The group’s projections now align with local banking groups like Investec, as well as Bloomberg consensus, which was also recently revised upwards to 1.1% y\/y. <\/p>\n\n\n\n

In April, the IMF slashed the country\u2019s forecast from the 1.5% projection in January to just 1.0%. This was a significant cut and followed a similar series of cuts to 2024\u2019s forecasts.<\/p>\n\n\n\n

The IMF\u2019s forecast of 0.8% GDP growth in 2024 was overestimated, and the final result was 0.5% (restated).<\/p>\n\n\n\n

Things did not look better when the group published its July review, with growth expectations for 2025 frozen at 1.0%.<\/p>\n\n\n\n

However, following a surprising GDP print for the second quarter of the year and the local economy proving to be resilient to the global tariff shocks\u2014at least for now\u2014there has been a turn.<\/p>\n\n\n\n

GDP growth in the second quarter surprised to the upside, at 0.8% qqsa, on the marked outperformance of the agricultural sector this year, and base effects.<\/p>\n\n\n\n

The US\u2019s numerous delays in implementing its universal tariffs have also had a positive impact.<\/p>\n\n\n\n

According to Investec Chief Economist Annabel Bishop, US trade policy has been volatile and disjointed to date in 2025, with a number of delays in universal tariff updates until it was finally implemented in early August. <\/p>\n\n\n\n

“Indeed, most of South Africa\u2019s exports to the US have avoided this tax for most of the year,” she said, contributing to the IMF’s revisions for South Africa’s GDP to 1.1% in 2025.<\/p>\n\n\n\n

Unfortunately, this more positive turn belies the continued pressure on the longer-term outlook.<\/p>\n\n\n\n

\"\"<\/a><\/figure>\n\n\n\n

2026 expected to be tougher<\/h2>\n\n\n\n

On the downside, the IMF expects South Africa’s growth in 2026 to be lower.<\/p>\n\n\n\n

The July projections for 2026 cut GDP expectations by 0.3 percentage points from 1.6% to 1.3%. The October outlook cut this down another 0.1 percentage points to 1.2%.<\/p>\n\n\n\n

The group attributed this to South Africa’s position as a commodity exporter in the wider context of global markets being under pressure due to the US tariffs, which are likely to remain in effect.<\/p>\n\n\n\n

Local economists have also noted that the real impact of the tariffs on South Africa will only be felt in the new year.<\/p>\n\n\n\n

According to Bishop, the IMF’s forecast is below Investec’s projection of 1.5% growth in 2026.<\/p>\n\n\n\n

“We continue to anticipate alleviations in the domestic freight crisis, driving faster export-led economic growth domestically,” she noted.<\/p>\n\n\n\n

The Bloomberg consensus for 2026 growth was also recently revised down to 1.5% y\/y, from 1.6% y\/y, with more severe protectionism from the US seen as impacting global and local growth.<\/p>\n\n\n\n

Bishop noted that concerns over US and global growth in 2025 and 2026 have had an impact on manufacturing production and sentiment, resulting in a suppressing effect on commodities\u2019 prices, excluding precious metals.<\/p>\n\n\n\n

This has had a knock-on effect on South Africa’s prospects.<\/p>\n\n\n\n

In this context, the IMF flagged the uncertain global environment and recommended that countries “restore confidence through credible, transparent, and sustainable policies”. <\/p>\n\n\n\n

“Trade diplomacy should be paired with macroeconomic adjustment. Fiscal buffers should be rebuilt,” it said.<\/p>\n","protected":false},"excerpt":{"rendered":"

The International Monetary Fund has published its October update to its World Economic Outlook report, which shows a more optimistic forecast for GDP growth in South Africa.<\/p>\n","protected":false},"author":10,"featured_media":840266,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[2720,2722,1498],"class_list":["post-840263","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-gdp","tag-imf","tag-investec"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840263","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=840263"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840263\/revisions"}],"predecessor-version":[{"id":840272,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/840263\/revisions\/840272"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/840266"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=840263"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=840263"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=840263"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}