According to a poll released, analysts have reduced their consensus estimate for South Africa’s economic growth this year by 0.3 percentage points in May 2025, the largest monthly downgrade since early 2023, as they account for the effects of the American tariffs. Growth projections were last reduced comparably in early 2023 due to power outages.
As per a May 22–27 survey of 26 economists, the median prediction for growth this year was 1.2%. The forecast was lowered recently from 1.7% to 1.5%. It further dropped to 1.6% for 2026, a decrease of 0.2 percentage points from the poll conducted last month.
“I have sliced 0.5 percentage points off my earlier forecast for GDP growth of 1.5%. The bigger negative impact on South Africa will likely emerge from the indirect effect of the trade war on the global economy at large, and specifically on South Africa’s major trading partners,” independent economist Elize Kruger said.
The country’s economy stagnated in the first quarter, eking out quarter-on-quarter growth of just 0.1%, as contractions in sectors like mining and manufacturing offset a strong performance by agriculture. However, this was not surprising, as Africa’s biggest economy has been struggling to build momentum since the 2008-2009 global financial crisis, with annual growth averaging less than 1% over the past decade.
Although business and consumer confidence has picked up since the formation of a coalition government in 2024, it has yet to translate into higher levels of output. However, the latest data was marginally better than expected, as economists polled by Reuters had predicted GDP would be unchanged from the previous quarter in seasonally adjusted terms.
Analysts and the country’s top statistics official, however, said the weak growth was worrying.
“Our economy is not growing sufficiently… and at this stage, it is easy for it to slide into the negative,” Statistician-General Risenga Maluleke told a press conference.
The agriculture sector grew more than 15% in the first quarter, making the biggest contribution to growth. However, mining shrank by 4% and manufacturing by 2%.
Statistics South Africa revised its estimate of fourth-quarter growth to 0.4% quarter-on-quarter, from an initial estimate of 0.6%. Capital Economics said in a research note that the data showed South Africa’s economic recovery was losing momentum, strengthening the case for more interest rate cuts from the central bank.
The country’s coalition government is trying to lift the growth rate through reforms, but longstanding problems like logistics bottlenecks at the ports and on the freight rail network are only slowly easing.
First-quarter GDP increased 0.8% year on year, versus forecasts for 0.7% growth. The central bank has already revised its 2025 growth forecast to 1.2% from 1.7%.
In early April, United States President Donald Trump proposed a 31% tariff on South Africa, but it was halted for 90 days, just like for other countries.
“Some sectors will feel the impact more severely, especially those that enjoyed duty-free access under the African Growth and Opportunity Act,” Kruger said, adding that the direct impact of tariffs is probably limited to about 8% of total exports.