IMF cuts SA growth forecast amid global uncertainty
The International Monetary Fund (IMF) has revised South Africa’s economic outlook, cutting its 2025 growth forecast from 1.5% to 1%, amid heightened global uncertainty and a surge in protectionist trade measures. The forecast for 2026 has also been reduced, dropping from 1.5% to 1.3%
The IMF’s latest World Economic Outlook highlights growing concern over the impact of elevated tariff rates and geopolitical tensions on global investment patterns, particularly in emerging markets like South Africa.
Chief Economist at Econometrix, Azar Jammine, attributes much of the instability to the United States’ recent tariff actions, which have unsettled international markets.
"The uncertainty created by the enormous tariffs that have been imposed by the United States or the threat thereof has had a terribly unsettling impact on business confidence and consumer confidence around the world.
"As a consequence, the IMF has felt and of course businesses are going to be reluctant to invest when there is so much uncertainty. So combining these factors, it's highly likely that the world economy is going to grow a lot slower than we previously anticipated."
He added that while both consumers and businesses may be affected, the lack of investment is where the most significant blow to South Africa’s economy will likely be felt.
"This will work through to impacting negatively on South Africa's economic growth, but I think where it will be felt more is on the lack of investment rather than the willingness of or otherwise of consumers to carry on spending."
As South Africa faces ongoing challenges of unemployment, inequality, and sluggish economic performance, the IMF’s downward revision adds further pressure on policymakers to boost investor confidence and shield the economy from external shocks.
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