South Africa Projects 2 Percent Economic Growth by 2028

(MENAFN) South Africa's economy is forecast to expand by 0.2 percentage points annually, reaching a growth rate of 2% by 2028, the country's National Treasury has projected — a cautiously optimistic outlook underpinned by structural reforms but shadowed by persistent structural vulnerabilities.

The projection builds on a post-pandemic GDP rebound in which the economy grew approximately 2.1% in 2022, according to Business Report. Sustaining comparable momentum could offer meaningful relief to one of the country's most entrenched crises — an unemployment rate that currently exceeds 31%.

At a recent National Budget Review presentation, Finance Minister Enoch Godongwana pointed to a brightening domestic growth outlook, supported by a gradually stabilising global economy even as geopolitical tensions continue to redraw trade routes and disrupt supply chains worldwide.

"We project real economic growth of 1.6% in 2026, an improvement from the 1.4% estimated in 2025," Godongwana declared.

He credited the improving trajectory to a strengthening of economic performance from the second half of 2025, adding that medium-term average growth is expected to consolidate around 1.8% before hitting the 2% milestone in 2028, a newspaper reported.

Deputy Finance Minister David Masondo reinforced that message during a pre-budget media briefing, drawing a direct line between rising investor confidence, easing interest rates, and declining risk premiums on one side, and the structural reforms the government has pursued over the past five to six years on the other.

"These reformative actions have significantly contributed to stabilising critical areas such as electricity supply, freight, rail, and easing visa applications to boost tourism and attract skilled labour," he explained.

The government is preparing to channel substantial capital into national infrastructure, with public sector expenditure projected to surpass R1 trillion over the next three years. Masondo stressed, however, that global resilience alone is insufficient, and that South Africa must accelerate domestic reform efforts to reinforce homegrown growth drivers amid lingering trade uncertainties.

On the global stage, growth is forecast to stabilise at 3.3% by 2026, matching 2025 estimates. While advanced economies are expected to expand at a restrained pace, emerging markets — particularly across Sub-Saharan Africa and India — are poised for stronger gains driven by robust domestic demand. China's ongoing transition from an investment-led to a consumption-driven economic model is expected to generate further shifts in global trade patterns.

Despite the constructive outlook, Godongwana cautioned that structural headwinds remain formidable. Persistent logistics bottlenecks, deteriorating public infrastructure, and disease outbreaks such as Foot-and-Mouth Disease continue to threaten domestic economic activity. He stressed that tackling deep-rooted constraints — including chronic unemployment and transport deficiencies — is non-negotiable for delivering durable growth.

"For the economy to thrive, faster implementation of reforms, especially in energy, water, and transport, is imperative," Godongwana stated, further asserting that a balanced fiscal approach and enhanced public state capacity are fundamental to driving rapid, inclusive growth.

As Pretoria charts a course through an uneven recovery, officials remain unified in their message: macroeconomic stability, accelerated structural reform, and targeted infrastructure investment are the cornerstones of a growth path capable of attracting private capital and delivering meaningful gains for South Africans.

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