IMF Executive Board Concludes 2025 Article IV Consultation with South Africa
IMF News, February 11, 2026
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- Published: February 11, 2026
Key findings on recent performance and outlook
- South Africa has faced repeated shocks in recent years, including due to higher global policy uncertainty in 2025.
- The economy has proven resilient thus far, owing to its ample natural endowments, independent institutions, and strong monetary policy framework.
- Economic activity picked up in 2025, with growth estimated at 1.3 percent, supported by robust private consumption.
- Inflation moderated to an average of 3.2 percent in 2025, enabling a shift to a lower 3‑percent inflation target.
- The current account remained stable despite higher US tariffs and global policy uncertainty.
- The banking sector remains sound.
- Public debt rose further, reaching 77 percent of GDP at end‑March 2025.
- Risks are tilted to the downside, related to continued trade and global policy uncertainty and domestic reform fatigue; upside risks include faster reform implementation and stronger global growth.
Projections (selected)
- Growth is projected to accelerate to 1.4 percent in 2026, reaching 1.8 percent in the medium term.
- Inflation is projected to reach the 3 percent target by end‑2027.
- Although fiscal deficits are moderating, they remain elevated, and public debt is projected to continue rising over the medium term.
- Risks: downside—global fragmentation, trade tensions, domestic reform fatigue; upside—faster reform implementation, stronger global growth.
Executive Board assessment — policy priorities and recommendations
- Directors emphasized the need for well‑coordinated policies and reforms to:
- safeguard fiscal sustainability,
- secure low and stable inflation,
- ensure financial stability,
- achieve higher and inclusive growth.
- Fiscal policy:
- Welcome commitment to strengthening fiscal sustainability.
- Emphasized credible, growth‑friendly, and socially acceptable fiscal consolidation to stabilize and reduce public debt while protecting priority spending.
- Recommended consolidation focused on reprioritizing and improving the efficiency and equity of public spending, protecting vulnerable groups, and continued efforts to mobilize domestic revenues.
- Noted that a fiscal rule anchored in a prudent debt ceiling could help underpin the adjustment and bolster credibility.
- Monetary policy:
- Commended the South African Reserve Bank for reducing inflation and the move to a lower (3 percent) inflation target with a narrower band.
- Recommended maintaining a flexible and data‑driven approach focused on guiding inflation expectations to the new target.
- Highlighted the importance of careful communication and gradual implementation of the new target to maintain credibility while preserving flexibility in case of shocks.
- Financial stability:
- Welcomed efforts on bank‑resolution, safety‑net reforms, and steps to bolster the AML/CFT framework that enabled South Africa’s exit from the FATF “grey list.”
- Encouraged continued monitoring of risks related to NPLs and the sovereign–financial sector nexus, and strengthening supervision of banks and non‑bank financial institutions.
- Underscored importance of improving access to finance (including SMEs) and bolstering payment‑system efficiency.
- Structural reforms:
- Welcomed ongoing electricity and logistics reforms to remove critical impediments to growth through higher private‑sector participation and encouraged resolute implementation.
- Supported additional reforms to improve the business environment, strengthen governance, combat corruption, improve labor market flexibility, address spatial disparities, and deepen trade diversification.
Selected economic and social indicators (as presented)
- Social and demographic indicators:
- Nominal GDP (2024, $ billion): 401
- GDP per capita (2024, current $): 6,253
- Total population (2024, million): 63
- Urban population (2023, percent of total): 68
- Life expectancy at birth (2023, number of years): 66
- Poverty (percent of population) — Below poverty line (3.65US$/day, 2023): 34
- Undernourishment (2023): 10
- Inequality (income shares unless otherwise specified) — Highest 10 percent of population (2017): 54; Lowest 40 percent of population (2017): 5; Gini coefficient (2017): 67
- Economic indicators (annual unless otherwise indicated)
- Real GDP (annual percentage change): 2024: 0.5; 2025 Est.: 1.3; 2026 Proj.: 1.4; 2027: 1.5; 2028: 1.7
- CPI (annual average, annual percentage change): 2024: 4.4; 2025 Est.: 3.2; 2026 Proj.: 3.6; 2027: 3.3; 2028: 3.0
- Output gap (percent of potential real GDP): 2024: -0.3; 2025: -0.1; 2026: 0.0
- Money and credit:
- Broad money (annual percentage change): 2024: 6.7; 2025 Est.: 4.2; 2026 Proj.: 5.0; 2027: 4.8; 2028: 4.7
- Credit to the private sector (annual percentage change) 1/: 2024: 3.9
- Repo rate (percent, end-period): 2024: 7.8; 2025: 6.8; ...
- Labor market:
- Unemployment rate (percent of labor force, annual average): 2024: 32.6; 2025 Est.: 32.5; 2026 Proj.: 32.4; 2027: 32.3
- Savings and investment (Percent of GDP):
- Gross national saving: 2024: 13.4; 2025 Est.: 12.5; 2026 Proj.: 12.4; 2027: 12.3
- Investment 2/: 2024: 14.1; 2025 Est.: 13.6; 2026 Proj.: 13.8
- Fiscal position (Percent of GDP) 3/:
- Overall balance: 2024: -5.8; 2025 Est.: -4.9; 2026 Proj.: -4.4; 2027: -4.2
- Primary balance: 2024: -0.5; 2025 Est.: 0.9; 2026 Proj.: 1.1
- Gross government debt 4/: 2024: 76.0; 2025 Est.: 77.8; 2026 Proj.: 78.5; 2027: 79.8; 2028: 81.1
- Balance of payments (Percent of GDP Unless Otherwise Indicated):
- Current account balance: 2024: -0.7; 2025 Est.: -0.9; 2026 Proj.: -1.2; 2027: -1.5; 2028: -1.7
- Gross reserves: 2024: 16.3; 2025 Est.: 17.6; 2026 Proj.: 16.0; 2027: 15.4; 2028: 14.8
- in months of next year's imports: 2024: 6.2; 2025 Est.: 6.3; 2026 Proj.: 6.0; 2027: 5.7; 2028: 5.5
- in ARA in percent, excl. CFM: 2024: 95.0; 2025 Est.: 99.1; 2026 Proj.: 91.7; 2027: 89.4
- in ARA in percent, incl. CFM: 2024: 106.2; 2025 Est.: 111.2; 2026 Proj.: 106.6; 2027: 102.9; 2028: 100.5
- Total external debt: 2024: 42; 2025 Est.: 46; 2026 Proj.: 47; 2027: 48
- Exchange rates:
- Real effective exchange rate (percent change): 2024: 0.8
- Exchange rate (Rand/U.S. dollar, end-period): 2024: 18.7; 2025 Est.: 16.6
- Memorandum item:
- Nominal GDP (billions of U.S. dollar): 2024: 431; 2025 Est.: 474; 2026 Proj.: 492; 2027: 512
IMF Executive Board press release summarizing the 2025 Article IV consultation with South Africa.