IMF Sees South Africa Growth Picking Up to 1.3% in 2025 But Warns on Rising Public Debt
WASHINGTON / PRETORIA, 8 December 2025. An International Monetary Fund staff team has estimated South Africa's real GDP growth at 1.3% for 2025, supported by stronger private consumption, and projects growth accelerating to 1.4% in 2026 and reaching 1.8% over the medium term, but warned that...
IMF Sees South Africa Growth Picking Up to 1.3% in 2025 But Warns on Rising Public Debt
WASHINGTON / PRETORIA, 8 December 2025. An International Monetary Fund staff team has estimated South Africa's real GDP growth at 1.3% for 2025, supported by stronger private consumption, and projects growth accelerating to 1.4% in 2026 and reaching 1.8% over the medium term, but warned that public debt is on course to continue rising despite narrowing fiscal deficits, according to the IMF's 2025 Article IV Mission concluding statement released on Monday.
The statement, which reflects staff-level findings ahead of a formal Executive Board review, noted that inflation moderated to an average of 3.2% in 2025, enabling the South African Reserve Bank and National Treasury to introduce a revised 3% point inflation target, the first change to the monetary anchor in 25 years. The IMF said the policy shift was appropriate given the improved inflation dynamics.
On fiscal matters, the IMF said public debt stood at 77% of GDP at end-March 2025 and was projected to continue rising toward approximately 81% of GDP by 2028, even as the budget deficit narrows. IMF staff said that the MTBPS target of achieving a primary surplus of 1.5% of GDP in FY2026 and 2.3% by FY2028 was insufficient to stabilise debt at the government's own target of 70% of GDP by 2033. The Fund said a primary surplus of around 3% of GDP would be required to achieve that debt path.
The IMF acknowledged South Africa's resilience, pointing to its natural endowments, independent institutions, and strong monetary policy framework, but identified persistent structural constraints, including product and labour market rigidities, spatial inequality, governance weaknesses, inadequate infrastructure, and high public debt, as limiting the country's growth potential and its ability to create jobs at the required scale.
Risks to the outlook were described as "tilted to the downside," with global trade and policy uncertainty, particularly in the context of US tariff policy, and potential domestic reform fatigue highlighted as key concerns. The IMF welcomed the government's structural reform agenda, including in energy and logistics, while urging faster implementation.
The Article IV consultation is an annual review conducted by the IMF under Article IV of its Articles of Agreement. The concluding statement represents staff-level findings and does not constitute formal IMF Board endorsement.