IMF upgrades SA’s growth outlook to 1.4%: 'Positive but nowhere near growth we need' says economist

The International Monetary Fund (IMF) has raised its projected growth forecast for South Africa in 2026, as well as its forecast for growth achieved in the past year.

In the January World Economic Outlook (WEO), it forecasts that the South African economy will grow by 1.4% this year. The projection for 2027 is 1.5%.

The 2025 forecast is also revised upward, projecting actual growth of 1.3%, which aligns with the World Bank’s forecast.

The IMF predicts global growth for 2026 at 3.3%, and slightly lower for 2027 at 3.2%. This is a slight upward revision since the October 2025 World Economic Outlook.

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While Stanlib chief economist Kevin Lings echoes this (slight) upswing in optimism from the IMF, he points out that the 1.4% growth forecast for this year falls far short of the type of growth we need.

Still, he does highlight the factors that have contributed to economic activity picking up, including the really important fact of policy initiatives pointing SA in the right direction.

"Things like starting to think about including the private sector in the rail industry, further development of renewable energy, getting the Philippines company (ICTSI) to be involved in Pier 2 at Durban harbour - so there are a couple of those initiatives which are not yet substantive in nature but they are I think moving in the right direction."

Adding to this improved outlook are interest rate cuts, lower inflation, SA's credit rating upgrade and removal from the grey list.

"Back in October, the IMF had us at 1.2% for this year so it is a small improvement. I guess it depends on your perspective - if you go back to 2024, we were growing this economy at half a percent, so the 1.4% forecast does feel a lot better, but if you think of what growth we need to make a difference it's got to be well in excess of 2; it's actually got to be above 3%."

Lings also notes that the IMF is forecasting growth for emerging markets at 4.2% in 2026, the type of growth rate he says South Africa really needs to be achieving.

Scroll up to the audio player to hear more of Lings' analysis