News24 | IMF boosts SA growth forecast, but Saudi Arabia takes a big knock from war

The International Monetary Fund (IMF) expects South Africa’s 2026 economic growth to equal that of 2025 at 1.1% – surprisingly lifting its quarterly outlook from the previous forecast of 1%.

This remains slightly below the 1.2% the SA Reserve Bank predicted at the end of May.

SA’s growth outlook is expected to “remain stable in the near term and continue to improve on the back of strengthened policy frameworks and ongoing structural reforms”.

Issuing its quarterly World Economic Outlook on Wednesday, the IMF cut its world growth forecast by a fraction, to 3%, saying the Middle East conflict was partly offset by “accelerated demand-driven momentum in the global technology cycle, thanks to advances in artificial intelligence and its adoption”.

Saudi Arabia is expected to be the hardest hit by the conflict, with the IMF lowering its growth forecast from 3.1% to 1.7%.

At the same time, the IMF slightly increased its inflation expectation, from a global average of 4.4% predicted in April to 4.7% now.

“Slightly revised upward from April, these projections indicate that the disinflation trend in place since the beginning of 2024 has stalled,” it said.

The world financier warns that the possibility of renewed Middle East conflict “looms large”. It could extend commodity price volatility, further threaten supply chains, and raise prices.

“The global economy as a whole has, so far, weathered the shock from the war better than feared. Movements in and repercussions from the main channels of transmission – commodity prices, inflation expectations, and financial conditions – have been relatively limited.

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