The Bureau for Economic Research (BER) at Stellenbosch University has downgraded its real GDP forecast for SA from 2% to 1.5% in 2025, citing mounting political instability and unresolved global economic risks.
This aligns with Moody’s Ratings, which also cut its forecast to 1.5% last week — a 0.2 percentage point downgrade from its February projection.
“Our [2%] forecast in January was based on the expectation of some crucial puzzle pieces finally falling into place,” chief economist Lisette IJssel de Schepper told delegates at the BER’s “Navigating Change: The GNU and a Trumpian World Order” conference in Sandton.
“Unfortunately, some puzzle pieces are now sliding from the table once again … and some pieces have been forcefully thrown on the floor by [US President Donald] Trump,” she said.
In 2027-30, the BER expects growth to average just 1.6%, and some within the organisation have questioned whether SA has effectively become a 1% growth economy, a level it has struggled to break through for more than 15 years.
The BER and Moody’s are more optimistic than the IMF, which recently slashed SA’s expected growth rate to 1% for this year.
According to the BER, the latest forecast downgrade revolved around two big uncertainties.
First is the outcome of events after July 9, when the 90-day pause on “Liberation Day” tariffs could end. The Trump administration imposed 31% tariffs on SA exports.
Regarding forecasting risks, the BER isn’t expecting a full return of the tariffs. It is also banking on some easing in the ongoing trade tensions between the US and China.
However, IJssel de Schepper noted that slower-than-expected growth in China was a downside risk over the medium term in that it would dampen industrial commodity prices and could hurt SA’s export prospects even more than now assumed.
The second big uncertainty is the durability and functionality of the government of national unity (GNU).
Though the GNU’s configuration has remained stable, risks of fragmentation are increasing, IJssel de Schepper noted in her presentation.“The closer we get to 2029, the more likely it becomes, but the less it will matter if it does change or fall apart,” she said.
The possible withdrawal of the DA, or inclusion of more radical parties such as the EFF or MK, could have profound consequences for reform and investor confidence, she said.
According to IJssel de Schepper, a weak DA within the GNU could be worse for policymaking than a strong DA in the opposition benches.
“It matters how the local elections play out in 2026 (especially who wins the big metros). The succession races between the ANC and DA are becoming increasingly important,” her presentation stated.
Natasha Marrian, political editor-at-large at Business Day, told delegates that the recent budget fiasco had undermined much of the initial optimism sparked by the formation of the GNU.
“I always had a sinking feeling that it was just a sugar high,” she said, adding that pulling off a successful budget later this month would be critical for the coalition’s longevity.
Marrian criticised the GNU’s clearing house mechanism — designed to help the ANC and DA resolve conflicts — as “nonfunctional”, adding that President Cyril Ramaphosa’s detached leadership style had worsened tensions.
In the background, ANC succession battles are already taking shape, with deputy president Paul Mashatile seen as a likely contender for party leadership in 2027.
Marrian noted that it was “very unlikely” the DA would remain part of the GNU under a Mashatile presidency, especially given the party’s decision to lay criminal charges against him last year.
She said she was hopeful about the DA’s future leadership, mentioning Cilliers Brink and Geordin Hill-Lewis as strong contenders.
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