World Bank cuts South Africa's growth forecast amid global conflict

Global financial institution expects country’s growth to improve gradually to 1.5% in 2027

- SIPHELELE DLUDLA

SOUTH Africa's fragile economic recovery is set to remain under pressure over the next two years, with the World Bank forecasting slower growth amid rising global uncertainty, higher energy prices and weaker international demand.

In its latest Global Economic Prospects report released yesterday, the World Bank revised South Africa's economic growth forecast for 2026 down to 1.0%, from an estimated 1.1% in 2025.

The forecast is also 0.4 percentage points lower than the institution's January projection of 1.4%, reflecting the fallout from the ongoing conflict in the Middle East and its impact on global markets.

The report paints a challenging picture for the global economy, with world growth expected to slow to 2.5% in 2026 from 2.9% in 2025, marking the weakest expansion since the COVID-19 pandemic. For South Africa, the downgrade underscores the economy’s vulnerability to external shocks at a time when domestic growth remains constrained by structural challenges, including weak investment, logistics bottlenecks, electricity constraints and high unemployment.

This is despite South Africa delivering a stronger-than-expected performance in the first quarter of 2026, which expanded by 0.5% from 0.4% growth recorded in the final quarter of 2025.