OECD slightly raises S. Africa’s growth outlook for 24-25

South Africa’s economy is expected to grow 1.0 per cent in 2024 and 1.4 per cent in 2025, according to the Organisation for Economic Co-operation and Development (OECD) economic outlook for 2024-2025 released on Thursday.

OECD’s projections for the country are almost the same made earlier in its Interim Economic Outlook released February, when the Paris-based organisation predicted a growth of 1.0 per cent in 2024 and 1.2 per cent for 2025.

“Real GDP will increase by 1 per cent in 2024 and 1.4 per cent in 2025. Supply constraints will diminish through fewer power outages and rail freight and port bottlenecks.” OECD report read.

“Lower lending rates will support a modest rise in investment. Declining energy and food prices will drive a further reduction in inflation. Increasing purchasing power, real wages and employment will support a gradual increase in consumption growth. Parliamentary elections scheduled for late May have heightened uncertainty.”

“Conditional on a further decline in consumer price inflation, monetary policy can be eased gradually over 2024 and 2025, which would support growth. The planned fiscal consolidation is welcome but insufficient to prevent a further increase in the public debt burden. Stronger potential growth and fiscal sustainability would benefit from an increased use of public-private partnerships for infrastructure investment and further reforms to state-owned enterprises, especially with regard to energy availability and logistics bottlenecks.”