AfDB slashes SA's growth forecast by half amid structural challenges, trade war concerns

THE African Development Bank (AfDB) has drastically cut South Africa’s gross domestic product (GDP) forecast for 2025 below 1%, saying that the economy continued to be weighed down by a range of structural constraints and could take a hit from Trump's trade war.

- SIPHELELE DLUDLA

In its Country Focus Report for South Africa published on Wednesday, the AfDB lowered its forecast for Africa’s most-industrialised economy to a meager 0.8% this year from a previous estimate of 1.6%.

This forecast by the AfDB is more pessimistic than the National Treasury's growth forecast of 1.4% for the year, which was revised down from a prior 1.9% on the back of geopolitical tensions including Trump’s trade levies.

It is also less than the South African Reserve Bank's latest projection of 1.2% this year amid declining mining and manufacturing output and rising unemployment, though it is expected to rise to 1.8% by 2027.