The World Bank has revised its economic growth forecast for South Africa, predicting a 1.8% growth rate in 2025, up from its previous forecast of 1.6%.

This upgrade is attributed to improvements in the country’s energy and logistics sectors, which have been driven by structural reforms initiated by the government.

The bank also expects South Africa’s GDP growth to reach 2.0% by 2027, an upward revision of 0.4 percentage points. However, the World Bank notes that this growth rate will not be enough to significantly reduce the country’s high poverty and unemployment rates, which are expected to remain above 60% and 30%, respectively, throughout the projection period.

To achieve a more significant impact on poverty and unemployment, South Africa would need to attain an annual growth rate of 5% to 6%, which the World Bank considers challenging in the short term due to structural constraints and the need for fiscal consolidation.

Despite these challenges, the World Bank acknowledges progress in key sectors and emphasizes the need for deeper reforms to unlock faster economic growth and job creation in the coming years.