Reserve Bank lowers economic growth projections for South Africa

JOHANNESBURG - The Reserve Bank has revised its economic growth projections for South Africa down marginally from 1.8% to 1.7% percent for 2025.

The revision comes amid continued concerns about the country’s inability to bounce back from underperformance.

Covid disruptions, red tape, poor investor sentiment and inefficiencies in electricity and logistics have all weighed down growth.

Growth picked up in the fourth quarter of last year – mostly thanks to the household sector. This was boosted by lower inflation and withdrawals from the two-pot pension system. 

“We have now revised down our 2025 growth forecast slightly to 1.7%, while leaving the outer years unchanged. We attribute lower growth partly to subdued demand, and partly to lingering supply-side fragilities,” said Reserve Bank Governor Lesetja Kganyago.

While the SARB has faced some pressure to lower interest rates to spur economic growth, some economists believe only accelerated structural reforms could ensure that SA hits the GNU’s desired growth rate of 3% by around 2027.