As of January 2025, South Africa's economic outlook is showing signs of improvement compared to the previous year. Economists predict an average growth rate of 1.8% for 2025, which, while better than last year's projections, still falls short of the 3% growth needed for significant job creation [b6327283].
Mike van der Westhuizen from Citadel emphasizes the importance of focusing on local issues rather than being overly influenced by U.S. policies, particularly in light of the uncertainties surrounding the 'year of Trump risk' [b6327283]. Energy security and infrastructure improvements are highlighted as critical factors for sustaining economic growth in the country.
Inflation is expected to average around 4.5% in 2025, which poses challenges for consumer spending and overall economic stability [b6327283]. Meanwhile, PwC forecasts a more conservative GDP growth range of between 0.5% and 1.3% for the same year, reflecting a cautious approach to economic recovery [b6327283].
The unemployment rate is projected to rise slightly from 32.7% in 2024 to 33.2% in 2025, indicating ongoing challenges in the labor market. However, there is an expectation of approximately 115,000 jobs being created in 2025, which could provide some relief to the high unemployment figures [b6327283].
Additionally, a repo rate cut of 50 basis points is anticipated in the first quarter of 2025, which may help stimulate economic activity and support growth initiatives [b6327283]. Overall, while South Africa's economic outlook for 2025 is more positive than a year ago, significant challenges remain, particularly in job creation and inflation management.