SA's growth to improve slightly, but job creation remains a challenge

World Bank says SA GDP growth is projected to accelerate from 0.5% in 2024 to 0.9% in 2025

- SIPHELELE DLUDLA

SOUTH Africa's economy is projected to grow modestly in 2025, supported by easing inflation and improving investor confidence, but structural weaknesses and persistent joblessness continue to weigh on the country’s recovery.

This is according to the World Bank’s latest Africa's Pulse report released on Tuesday, which provides economic analysis for Sub-Saharan Africa.

The World Bank said gross domestic product (GDP) growth in South Africa was projected to accelerate from 0.5% in 2024 to 0.9% in 2025 and further speed up to an annual average rate of 1.2% in 2026-27.

The biannual report forecasts regional growth to edge up to 3.8% in 2025 from 3.5% in 2024, driven by easing inflationary pressures and a gradual recovery in investment. This is better than the 3.7% forecast by the bank in its Global Economic Prospects in June.

Excluding Angola, Nigeria, and South Africa, growth in the region is expected to strengthen from 4% in 2024 to about 4.8% in 2025 and accelerate further to 5.6% per year in 2026-27.

“Over the next quarter century, Sub-Saharan Africas working-age population will grow by more than 600 million,” said Andrew Dabalen, World Bank chief economist for the Africa Region.

“The challenge will be matching this growing population with better jobs, given that only 24% of new workers today land wage-paying jobs. A structural shift toward more medium and large firms is essential to generate wage jobs at scale.”

However, the World Bank warned that South Africa’s growth remains too low to tackle its high unemployment and poverty levels.