IMF upgrades SA’s growth outlook but warns of fragile recovery

IMF's October 2025 World Economic Outlook shows that growth is expected to hold at 1.2% in 2026

- SIPHELELE DLUDLA

WHILE power supply stability improved following reforms at Eskom and new renewable energy capacity additions, the IMF notes that energy and logistics bottlenecks continue to suppress productivity and investment.

(LEON LESTRADE Independent Newspapers)

THE International Monetary Fund (IMF) has slightly upgraded South Africa’s economy by 0.1 percentage points to 1.1% in 2025, up from a previous forecast of 1% projected in April, and up slightly from 0.5% in 2024.

The IMF's October 2025 World Economic Outlook (WEO) released on Tuesday showed that growth is also expected to hold at 1.2% in 2026, signaling a slow and uneven recovery as global and domestic constraints weigh on output.

The IMF's forecast underscored the country’s fragile momentum within a volatile international environment marked by rising trade barriers, weaker global demand, and tightening fiscal positions across developing economies.

While power supply stability improved following reforms at Eskom and new renewable energy capacity additions, the IMF noted that energy and logistics bottlenecks continue to suppress productivity and investment.

Frequent disruptions in rail and port operations have limited the competitiveness of key export sectors such as mining and manufacturing.