Economists downgrade South African growth
The downgrade is mild as the March consensus forecast for 2026 is 1.5% compared with 1.6% in February. This is substantially above the International Monetary Fund (IMF) forecast of 1.0%.
Black News 
Economists downgraded South African growth in March and raised their inflation forecasts due to the Middle East conflict.
The latest results from the Bureau of Market Research (BMR) / Unisa Economist of the Year (EoY) competition point to a more uncertain and fragile economic outlook for both South Africa and the global economy.
The downgrade is mild as the March consensus forecast for 2026 is 1.5% compared with 1.6% in February. This is substantially above the International Monetary Fund (IMF) forecast of 1.0%. The IMF cut its forecast from 1.4% made in January.
This followed growth of 1.4% in 2025 after a 0.4% gain in 2024. This is measured from the expenditure side. This measure is what most economists, including the National Treasury, use when making their forecasts.
The BMR/Unisa Economist of the Year Competition brings together leading economists to provide independent forecasts on key economic indicators. A total of 43 economists are participating in the 2026 competition.
Differing Views
While there is broad agreement by the participating economists on the overall direction of the economy, differences remain regarding the strength of the consumption rebound and the investment outlook.
Participants emphasised that the economic outlook remains highly dependent on how geopolitical tensions evolve in the coming months.
Even if such tensions subside in the short term, their direct, indirect and induced effects are expected to continue filtering through the global economy for some time.
Downside risks
Downside risks to the outlook now appear more prominent than upside surprises. This is one of the reasons why economists downgraded growth.
Some economists expect household finances to strengthen, supporting real household consumption expenditure growth above 2%. Others remain cautious, citing high unemployment, tight credit conditions and ongoing political and policy uncertainty.
The South African Reserve Bank reported that the ratio of net wealth to disposable income increased to 425% in 2025 from 398% in 2024. As South Africans grew richer in 2025, so they could spend more. Therefore, real household final consumption expenditure increased by 3.6% in 2025 from only a 1.0% gain in 2024.
Views on fixed investment also differ. More optimistic forecasts assume gradual progress in structural reforms in transport, water and energy, alongside improved private-sector participation and enhanced confidence.
In March the National Treasury launched a R54 billion performance-based grant. The aim is to increase investments in water, sanitation, electricity and waste infrastructure services by the country’s eight metropolitan municipalities, or metros.
The government will provide an update on structural reforms on 22 April. This will be the third update under Phase II of Operation Vulindlela.
The briefing will provide an overview of progress made to date, highlight key reform milestones, and facilitate discussions on the economic implications and opportunities arising from the reform agenda.
More cautious perspectives highlight risks associated with policy direction, governance concerns, biosecurity challenges in agriculture, and uncertainty linked to domestic political developments, including the local government elections.
