IMF slashes South Africa's growth forecast as US tariffs wreak havoc

The IMF on Tuesday projected SA's GDP to rise only to 1% in 2025, and 1.3% in 2026

- SIPHELELE DLUDLA

THE International Monetary Fund (IMF) has slashed South Africa's economic growth projections for 2025 by 0.5 percentage on the back of slowing activity in the country's two largest trading partners amid rising US tariffs.

The US government announced sweeping reciprocal import tariffs on 60 countries earlier this month, sparking retaliation and raising trade barriers to levels not seen since the Great Depression.

In its World Economic Outlook (WEO) for April, the IMF on Tuesday projected South Africa's real gross domestic product (GDP) to rise only to 1% in 2025 and 1.3% in 2026, which will also drag down the Sub-Saharan African economy.

Though this projection is an increase from 0.6% in 2024 and 0.7% in 2023, it is a significant downward revision in GDP prospects after the IMF in January forecast 1.5% and 1.6% growth in South Africa's economy this year.

'For Sub-Saharan Africa, growth is expected to decline slightly from 4% in 2024 to 3.8% in 2025 and recover modestly in 2026, lifting to 4.2%,' noted the WEO report.