Treasury trims 2025 growth outlook, pins hopes on reforms to lift long-term momentum

THE National Treasury has revised South Africa's economic growth forecast for 2025 downward, citing weaker global and domestic conditions, but remains optimistic that ongoing structural reforms in energy and logistics will help the economy gain traction in the coming years.

- SIPHELELE DLUDLA

In its the Medium-Term Budget Policy Statement (MTBPS) tabled on Wednesday, Treasury said it now expects real gross domestic product (GDP) growth of 1.2% in 2025, down from 1.4% projected in February.

The revision follows weaker-than-expected performance in the first half of the year, subdued consumer and business confidence, and a fragile global recovery.

Despite the downgrade, the 2025 forecast still marks a recovery from the 0.5% growth recorded in 2024, with Treasury projecting an improvement to 1.8% on average between 2026 and 2028 as reform momentum builds and infrastructure investment strengthens.

Finance Minister Enoch Godongwana said South Africa's growth prospects are being shaped by both domestic challenges and external pressures, including slowing global trade and geopolitical tensions.

"Domestically, we forecast real GDP growth of 1.2% for 2025, more than double the economic growth in 2024. The growth outlook strengthens moderately over the medium term," Godongwana said. "The structural reforms we have embarked on, particularly in energy and logistics, will be key to lifting our rate of growth closer to levels demanded by our developmental needs."