A sign for the International Monetary Fund outside its headquarters in Washington, DC. (Photo: EPA-EFE / Jim Lo Scalzo) | A South African flag flying in a settlement in Strandfontein, Cape Town. (Photo: EPA-EFE / Nic Bothma) 
The International Monetary Fund (IMF) has marginally raised its forecast for South African economic growth for 2026 to 1.4% from 1.2%, a rate that remains woefully inadequate to address the country’s many and mounting socioeconomic challenges.
Still, coming on the heels of a similar upward revision by the IMF’s sister institution the World Bank and South Africa’s recent removal from the EU’s “list of High-Risk Third Country Jurisdictions”, the move gives Team SA another positive headline as it seeks to woo investors at the annual global business pageant in Davos.
The World Bank last week lifted its 2026 projection for South African gross domestic product (GDP) growth by 0.3 percentage points to 1.4%, and to then rise marginally to 1.5% next year.
“Continued reform momentum – particularly in energy and logistics – alongside rising public investment is expected to crowd in private investment and support medium-term growth prospects,” the World Bank said.
What this means
South Africa’s rates of economic growth remain in the slow lane, fall short of the pace needed for to attract investment on a scale that could meaningfully create jobs and provide opportunities for business big and small. But you have to start somewhere, and the progress that has been made over the past 12 months is in the right direction.
This is a nod to Eskom and Transnet. The former’s performance has seen a massive improvement, while Transnet seems to be on the road to recovery.
Eskom, Transnet and “reform” — these all hold the keys needed to unlock faster rates of domestic economic growth. When S&P Global Ratings lifted South Africa’s credit rating late last year, it pointedly underlined Eskom’s achievements while noting that reforms at Transnet were “ongoing”.
“South Africa will showcase its improving economic position reflected in strengthening investor confidence. Key recent developments include the stabilisation of electricity supply, removal from the Financial Action Task Force’s (FATF) greylist, and an upgrade of the sovereign credit rating by the rating agency S&P Global,” the Treasury said in a statement flagging Team SA’s mission to Davos headed by Finance Minister Enoch Godongwana.
“The ministers will highlight progress on structural reforms across energy, logistics, water, digital communications and small business sectors, among others. The delegation’s strategic intent is to position South Africa as an attractive investment destination.”
This is Team SA’s annual remit in Davos – to boldly go into the snow in a bid to melt the icy perceptions that global investors hold regarding South Africa.
And some progress has clearly been made, and the IMF and World Bank growth upgrades – part of their wider global outlooks – reflect that.
But it is surely also a bad sign when a forecast for growth of 1.4% is an upgrade. The World Bank now pegs global growth for 2026 at 2.6% and 4.3% for sub-Saharan Africa. The IMF sees worldwide output rising this year at 3.3% and sub-Saharan Africa’s growth at 4.6%.
Viewed through this prism, South Africa clearly remains a laggard and Team SA’s reception at Davos may remain frosty. DM