The International Monetary Fund (IMF) has nudged SA’s expected growth for 2025 slightly higher to 1.1%, from its April and July forecast of 1.0%. The forecast for 2026 has been revised down to 1.2%, from the earlier projection of 1.3%.
Even with the upward revision, SA remains in the lower ranks of emerging market and developing economies, many of which are expected to grow at 3%-4% or more.
The revised outlook comes as the IMF raised its global growth forecast to 3.2% for 2025, up from 3.0% in July, “thanks to the agility of the private sector, which front-loaded imports in the first half of the year and speedily reorganised supply chains to redirect trade flows, the negotiation of trade deals between various countries and the US and the overall restraint from the rest of the world, which by and large kept the trading system open”, the Fund said.
The forecast for 2026 remains unchanged at 3.1%.
Despite these improvements, the IMF warned that the global economy remained fragile, with risks “tilted to the downside”. These include policy uncertainty, persistent trade fragmentation and the possibility of an abrupt unwinding of the AI investment boom that has buoyed markets in advanced economies.
“Should we conclude that the shock triggered by the tariff surge had no effect on global growth? That would be both premature and incorrect,” the IMF said.
“Premature because the US effective tariff rate remains high, and trade tensions continue to cast a shadow over the global economy, with trade policy uncertainty remaining high.”
According to the IMF, the effects of those tensions could well increase over time as firms gradually pass the tariffs on to customers as trade is rerouted more permanently and the global economy gradually becomes less efficient.
“Past experience suggests that it may take a long time before the full picture emerges,” it said.
“[A statement that the shock triggered by tariffs had no effect on global growth would also be] incorrect because other important forces, besides trade policy, are shaping a complex outlook.”
The Fund’s broader advice to emerging markets, which applied to SA, included accelerating structural reforms, improving public investment efficiency and preserving central bank independence to keep inflation expectations anchored.
It cited the SA Reserve Bank as a case study in how emerging markets could strengthen credibility by maintaining central bank independence.
The Fund also highlighted how global commodity prices rippled through certain economies — including SA’s. Using a new measure called the “network-adjusted value-added share” (navas), it found that countries with deeply connected commodity sectors, such as SA’s mining industry, felt wider effects when prices rose or fell.
When demand for minerals weakened, the impact spread beyond the mines to transport, manufacturing, household income and tax revenues. That showed how strongly SA’s economic health was still tied to the fortunes of its mining sector.
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