Minister of Finance, Enoch Godongwana, tabled the 2025 Budget Speech during the National Assembly plenary at the Cape Town International Convention Centre.
Image: Phando Jikelo/ Parliament of SA
In presenting the third iteration of the National Budget, Finance Minister Enoch Godongwana said that gross domestic product (GDP) for the year would come in at 1.4% this year, down from a previously predicted 1.9%.
Recently, ratings agency Moody’s dropped South Africa’s expected GDP growth to come in at 1.5%, down from its initial 1.7% figure, while the South African Reserve Bank previously anticipated 1.7% and the International Monetary Fund had an estimate of 0.8%.
Last year, overall growth was 0.6%. A government and business partnerships had been aiming for 3% this year to create a million jobs.
Ahead of the National Budget, Investec chief economist, Annabel Bishop, said that 2025 is likely to see GDP growth of 1.3% year-on-year, revised down from 1.8% at the start of the year.
The Bloomberg economic consensus for GDP growth this year is currently 1.4% year-on-year, she noted.
In announcing the decline in projected economic growth, Godongwana said that “South Africa is dependent on global trade and financial inflows. This makes us particularly exposed to the global economic developments.”
Over the next two years, the Department projects real GDP growth to rise moderately, to 1.6% in 2026 and 1.8% in 2027.
“Looking further ahead, the risks to the outlook remain elevated. These include the worsening global outlook, weaker-than-expected growth in the fourth quarter of 2024, the persistence of logistics constraints and higher borrowing costs,” said Godongwana.
Godongwana added: “These developments are a vivid reminder that we must urgently turn the tide on our economic prospects and get our fiscal affairs in order. Faster, inclusive growth that creates jobs is the only path towards a more prosperous South Africa. Attaining this growth must be our national obsession. We all have a stake and a responsibility to work towards this goal.”