JOHANNESBURG – South Africa’s economic growth is expected to be weaker than previously forecast for 2025, with economists citing trade tensions as a key factor. A Reuters poll of 25 economists conducted from April 16-24 lowered the median growth forecast by 0.2 percentage points to 1.5%, compared with a range of 1.0%–2.1%. The 2026 growth forecast remains unchanged at 1.8%.
The downward revision follows U.S. President Donald Trump’s temporary pause of a proposed 31% tariff on South African imports for 90 days. Nicky Weimar, chief economist at Nedbank, revised her GDP forecast to 1.1%, citing higher global tariff barriers and weak domestic production in the first quarter of 2025.
South Africa currently benefits from the African Growth and Opportunity Act, which provides preferential tariff-free access to U.S. markets, but analysts warn the act’s renewal later this year is uncertain.
In positive economic news, inflation fell in March to its lowest level since June 2020, largely due to lower fuel costs and slower tuition increases. The government also scrapped plans to raise value-added tax following public backlash. Inflation is now expected to average 3.7% in 2025, down from the previous 4.0% forecast, while 2026’s projection remains at 4.5%.
The inflation decline has renewed discussion about potential interest rate cuts by the South African Reserve Bank (SARB). The current repo rate is 7.50%, and the survey indicates it is likely to remain steady until July or September before a possible reduction to 7.25%, with another cut to 7.00% expected in early 2026.
Economists said the combination of global tariff concerns, domestic production challenges, and inflation trends will shape South Africa’s economic trajectory in the coming months.
