The World Bank has raised its economic growth forecast for South Africa this year to 1.4%, slightly higher than its June 2022 expectation but lower than its January 2025 expectation. According to theWorld Bank’s Global Economic Prospects, which gives an update on global economic developments, global prospects remain firmly tied to United States (US) President Donald Trump’s ‘America First’ agenda. Brendon Verster, senior economist at Oxford Economics Africa, says familiar challenges continue to plague economies across sub-Saharan Africa (SSA), with the World Bank highlighting that economic growth remains insufficient togenerate meaningful reductions in unemployment and poverty.
The World Bank says the global economy is proving more resilient than anticipated amid persistent trade tensions and policy uncertainty, with global economic growth projected to ease to 2.6% this year from an estimated 2.7% in 2025. Verster says the World Bank’s latest forecasts are slightly more upbeat than its June 2025 update, when it predicted that global gross domestic product (GDP) growth would dip to 2.3% in 2025 before nudging higher to 2.4% in 2026. The upward adjustment largely stems from better-than-expected growth in the US, but the World Bank pointed out that the 2020s are set to be the weakest decade for global growth since the 1960s, with its chief economist, Indermit Gill, noting that “with each passing year, the global economy has become less capable of generating growth and seemingly more resilient to policy uncertainty.” “With all economies in the region predicted to expand this year, the World Bank commented that its improved outlook is driven by ongoing reforms in some of the region’s heavyweight economies, robust domestic investment and easing price pressures.” The World Bank raised South Africa’s 2026 growth projection to 1.4%, up 0.3 percentage points from its June 2025 forecast and marginally higher than the estimated 1.3% expansion in 2025 (previously 0.7%).
For 2027, the World Bank expects economic growth of 1.5%. Verster says this improved outlook is mainly based on reform momentum in energy and logistics, coupled with rising public investment. “Private consumption and investment are expected to remain the largest growth drivers, supported by efforts to improve the efficiency of public expenditure and ease supply-side constraints.” South Africa, where activity is expected to be underpinned by private consumption and investment. Ongoing reforms in the business environment and the public sector are expected to continue supporting growth.
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