The International Monetary Fund lowered its forecast for South Africa’s economic growth this year to 1% from 1.1% on Tuesday, in its October World Economic Outlook.

Its 2027 forecast stays at 1.3%. Both numbers match the IMF’s April forecasts, the projections table in the report’s first chapter shows. It expects sub-Saharan Africa to grow 4.5% in 2026 and again in 2027. Emerging market and developing economies are forecast to grow 3.7% this year, and the world economy 3.1%.

The IMF said South Africa’s growth would “remain stable in the near term and improve gradually over the medium term”. It credited better policy frameworks and continuing structural reforms. Its statistical tables have growth reaching 1.8% by 2031.

This year’s forecast has changed three times since January, when the IMF expected 1.4%. It cut the figure to 1% in April, when it said the conflict in the Middle East would slow growth, and raised it to 1.1% in July.

Inflation is now expected to run higher. The IMF forecasts average consumer inflation of 4.4% this year and 3.9% in 2027, up from 3.9% and 3.4% in April. It sees the annual rate at 5.4% in December, easing to 3.4% by the end of 2027.

IMF growth forecasts, October 2026 (%)Real GDP growth; 2026 and 2027 are forecasts

202520262027

South AfricaSouth Africa: 2025: 1.1%1.1%South Africa: 2026: 1.0%1.0%South Africa: 2027: 1.3%1.3%Sub-Saharan AfricaSub-Saharan Africa: 2025: 4.5%4.5%Sub-Saharan Africa: 2026: 4.5%4.5%Sub-Saharan Africa: 2027: 4.5%4.5%Emerging market and developing economiesEmerging market and developing economies: 2025: 4.5%4.5%Emerging market and developing economies: 2026: 3.7%3.7%Emerging market and developing economies: 2027: 4.4%4.4%WorldWorld: 2025: 3.5%3.5%World: 2026: 3.1%3.1%World: 2027: 3.4%3.4%
South AfricaSouth Africa: 2025: 1.1%1.1%South Africa: 2026: 1.0%1.0%South Africa: 2027: 1.3%1.3%Sub-Saharan AfricaSub-Saharan Africa: 2025: 4.5%4.5%Sub-Saharan Africa: 2026: 4.5%4.5%Sub-Saharan Africa: 2027: 4.5%4.5%Emerging market and developing economiesEmerging market and developing economies: 2025: 4.5%4.5%Emerging market and developing economies: 2026: 3.7%3.7%Emerging market and developing economies: 2027: 4.4%4.4%WorldWorld: 2025: 3.5%3.5%World: 2026: 3.1%3.1%World: 2027: 3.4%3.4%

Source: IMF World Economic Outlook, October 2026. Chart: Rand Desk

The unemployment forecast has also risen. The IMF expects the rate to average 33.2% this year and 33% in 2027, against 32.5% and 32.4% in its April forecast. Stats SA put unemployment at 33.6% in the second quarter, with 8.5 million people unemployed.

Local growth forecasts are higher. In September the Reserve Bank lowered its 2026 growth forecast to 1.2% from 1.4%, after output shrank by 0.2% in the second quarter. It still expects growth of around 2% over the medium term. National Treasury’s February budget forecast growth of 1.6% this year and 1.8% in 2027, with inflation of 3.4% and 3.3%.

Around the world, the IMF expects headline inflation to rise to 4.7% this year. It assumes oil will average US$95.74 a barrel in 2026, up from US$67.74 in 2025. Silvana Tenreyro, the IMF’s chief economist, said in a blog post on the report that where inflation stays high because of dearer commodities, technology spending or other causes, “monetary policy will need to tighten further”.

The Reserve Bank raised its policy rate to 7.25% in September. Our explainer on the repo rate shows how that decision reaches home loans, and our latest rand report tracks the currency against the dollar.

Finance Minister Enoch Godongwana will publish Treasury’s updated growth and inflation forecasts in the Medium-Term Budget Policy Statement on 21 October. The next consumer inflation figures are due the same day. The Reserve Bank announces its next interest rate decision on 19 November, and Stats SA publishes third-quarter GDP on 1 December.