South Africa’s economy set to grow at 1.8% despite decade of stagnation

Finance Minister Enoch Godongwana delivered the Budget Speech in Parliament on Wednesday, revealing that South Africa’s economy is projected to grow at an average of 1.8% from 2025 to 2027.

This comes after a decade of sluggish growth, with GDP growth averaging less than 2% over the past ten years.

Godongwana admitted that the economy has stagnated for far too long, falling short of the levels needed to meet the country’s expanding needs.

To address this, the government has outlined a plan to boost growth through increased investment and public infrastructure spending.

The Budget Review released by the Department of National Treasury detailed the reasoning behind the projected growth, citing higher investment and household consumption as key drivers.

The government plans to allocate over R1 trillion towards public infrastructure over the next three years, with a focus on transport, energy, and water and sanitation projects.

Key projects include a R100 billion investment in road maintenance by SANRAL, upgrades to the commuter rail system by PRASA, and a provision of R19.2 billion for critical signalling upgrades.

These initiatives are aimed at not only boosting economic growth but also providing affordable transport options for low-income households.

Despite some concerns over rising inflation due to a recent VAT increase, the government remains optimistic about the country’s growth prospects.

The outlook for global growth is also positive, with stabilisation expected in the coming years.

Overall, the government’s plan to bolster growth and employment is centred around maintaining stability, implementing structural reforms, building state capability, and supporting public infrastructure investment.

By addressing these key areas, South Africa aims to move towards a faster economic growth path and create much-needed jobs for its citizens.