Economists predict modest growth for South Africa's economy in 2025, citing structural and cyclical improvements. While post-US election policies and potential tariffs pose risks to growth and inflation in 2026, factors like easing electricity constraints, improving logistics, and a potential fiscal rule implementation are expected to bolster the economy.
After a few bleak years, economists now believe there is hope for South Africa ’s economy to grow in 2025 and inflation to stay low.Economists believe that South Africa ’s economy will improve in 2025 but warn that geopolitical risks remain elevated with post-US election policies, including possible tariffs, potentially hitting growth and inflation in 2026.
“Structural improvements that will lift growth and further boost confidence include electricity, logistics, reforms, implementation of a fiscal rule and aSouth Africa had no load shedding for the past nine months and no serious load shedding is expected, although further reforms are needed, he says. Els also predicted an improved environment for fixed investment growth regarding infrastructure and private production capacity.
The global base case suggests a Brent oil price of around $65 – $70 per barrel for 2025, while he expects food inflation to drift up slowly during the first half of the year before accelerating somewhat in the second half to reach 6% by the end of 2025 from the current 1.6%. He says the Rand is unlikely to weaken significantly from current levels, with the base case expectation being that the Rand-/dollar exchange rate will be more stable in 2025.
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