Treasury slashes SA's GDP forecast for 2025 by 0.5 percentage points

THE National Treasury has revised South Africa's growth forecast for 2025/26 fiscal year drastically lower on the back of a weaker global outlook, trade frictions, increased uncertainty, and lower projected investment.

- SIPHELELE DLUDLA

Finance Minister Enoch Godongwana told Parliament on Wednesday that since the publication of the Budget Review in March, greater uncertainty and trade fragmentation had contributed to a weaker economic outlook.

Godongwana highlighted that South Africa was highly exposed to external volatility as a small open economy dependent on global trade and financial inflows.

On the back of heightened trade tensions and elevated policy uncertainty weighing on the global outlook, Godongwana said Treasury had to revise its GDP figures downwards by 0.5 percentage points. "As a result, we now estimate real GDP to grow at 1.4% in 2025. This is lower than the 1.9% we projected in March," he said.

Godongwana said the outlook was negatively affected by the impact of weaker-than-expected growth in the fourth quarter of 2024, along with persistent logistics constraints, heightened political uncertainty, high borrowing costs and global headwinds.