The International Monetary Fund has left its 2026 growth forecast for South Africa largely unchanged at 1%, against 1.1% in its July update, as higher oil prices linked to the Middle East war weigh on an economy that shrank in the second quarter.
In its October World Economic Outlook, published on Tuesday, the fund said South Africa’s outlook should remain stable in the near term and improve gradually over the medium term, supported by stronger policy frameworks and continuing structural reforms.
The forecast has moved within a narrow band this year. The IMF projected 1.4% in January, cut it to 1% in April as the conflict pushed up energy costs, raised it to 1.1% in July and has now returned to 1%. National Treasury forecast 1.6% in the February budget, an estimate finance minister Enoch Godongwana is expected to revise in next week’s medium-term budget policy statement.
Forecasts and outcomes for 2026 growth
| Forecaster or indicator | Date | Figure |
| IMF, South Africa | Jan 2026 | 1.4% |
| IMF, South Africa | Apr 2026 | 1.0% |
| IMF, South Africa | Jul 2026 | 1.1% |
| IMF, South Africa | Oct 2026 | 1.0% |
| National Treasury, South Africa | Feb 2026 | 1.6% |
| SA GDP, quarter on quarter | Q1 / Q2 2026 | 0.4% / -0.2% |
| IMF, sub-Saharan Africa | Oct 2026 | 4.5% |
| World Bank, sub-Saharan Africa | Oct 2026 | 4.3% |
Domestic data point to a weak second half. GDP fell 0.2% in the second quarter after growth of 0.4% in the first. Mining output dropped 12.7% in August, according to figures reported by Business Day, suggesting a further drag in the third quarter. Petrol prices have breached R30 a litre, reaching record levels after the 7 October adjustment.
South Africa is a net importer of oil and refined fuel, which places it in the group the IMF identifies as most exposed: energy-importing economies with limited links to the technology investment cycle. Such countries face higher import bills, currency pressure, weaker real incomes and less fiscal room, with few offsetting sources of demand. The rand has weakened about 1.3% against the dollar over the past month and traded at around R16.45 on Wednesday.
The fund raised its sub-Saharan Africa forecast to 4.5% from 4.3%, though it said the figure masks wide differences in policy space, reform progress, commodity exposure, climate shocks and access to external finance. Nigeria is expected to benefit from improved macroeconomic stability and favourable terms of trade, although higher prices for essentials are likely to deepen poverty and food insecurity there.
The World Bank last week raised its 2026 regional forecast to 4.3% from 4%, compared with 4.1% in 2025, while warning that growth remains too slow to cut extreme poverty or create enough jobs for a fast-growing labour force. It cited the US-Iran conflict, trade uncertainty, tighter financing conditions, natural disasters and insecurity as risks.
Globally, the IMF said activity in the first half held up better than expected despite the war and trade tensions, but described the resilience as uneven, with narrowing room to absorb further shocks. It noted that economies with strong exposure to AI-related investment, and energy exporters outside the conflict zone, have fared best.