The International Monetary Fund (IMF) has made a small 0.2 percentage point upward revision to South Africa’s projected growth for 2026 in its January World Economic Outlook (WEO), forecasting that the economy will grow by 1.4% this year.

Its 2027 growth projection of 1.5% for South Africa, which was published in October, has been sustained, while the January WEO estimates that South Africa’s GDP expanded by 1.3% in 2025.

The IMF update for South Africa is in line with projections released by the World Bank in its January ‘Global Economic Prospects’ report, as well as the IMF’s small upward revision for global growth.

The IMF expects the global economy to expand by 3.3% in 2026, also a 0.2 percentage point upward revision relative to its October report. It has sustained its 3.2% projection for world growth in 2027.

Global headline inflation, meanwhile, is expected to decline from an estimated 4.1% in 2025 to 3.8% in 2026 and further to 3.4% in 2027.

“This steady performance on the surface results from the balancing of divergent forces,” the report states.

“Headwinds from shifting trade policies are offset by tailwinds from surging investment related to technology, including artificial intelligence (AI), more so in North America and Asia than in other regions, as well as fiscal and monetary support, broadly accommodative financial conditions, and adaptability of the private sector.”

The January WEO also forecasts that growth in sub-Saharan Africa will accelerate from 4.4% in 2025 to 4.6% in 2026 and 2027, supported by macroeconomic stabilisation and reform efforts in key economies.

However, the January WEO warns that risks to the outlook remain tilted to the downside.

“Reevaluation of productivity growth expectations about AI could lead to a decline in investment and trigger an abrupt financial market correction, spreading from AI-linked

companies to other segments and eroding household wealth.

“Trade tensions could flare up, prolonging uncertainty and weighing more heavily on activity.

“Domestic political tensions or geopolitical tensions could erupt, introducing new layers of uncertainty and disrupting the global economy through their impact on financial markets, supply chains, and commodity prices.

“Larger fiscal deficits and high public debt could put pressure on long-term interest rates and, in turn, on broader financial conditions,” the WEO states.