S&P trims South Africa growth outlook as inflation and rate pressures build

S&P's projection is significantly lower than National Treasury's estimation of 1.6% in 2026 and 1.8% over the medium term.

South Africa’s economic growth outlook has been revised lower by S&P Global Ratings, which now expects the country to face slower expansion over the next two years amid rising inflationary pressure, rising energy costs and the likelihood of further interest rate increases.

In its latest Emerging Markets Economic Outlook released on Thursday, the agency cut South Africa’s 2026 gross domestic product (GDP) forecast by 0.2 percentage points to 1.3%, down from 1.5% projected in March. The 2027 forecast was also reduced by the same margin to 1.5%.

The revised figures remain below National Treasury’s projections of 1.6% growth in 2026, 1.8% over the medium term and 2% by 2028. Finance Minister Enoch Godongwana has indicated that the government will reassess its growth assumptions ahead of the medium-term budget policy statement in October.

Last week, the World Bank also downgraded its 2026 South Africa forecast to 1.0%, citing weaker global demand, higher energy costs and elevated uncertainty.