Is the IMF keeping South Africa's 2026 growth forecast steady?

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1. 1

   South Africa

   IMF Staff Country Reports (Dept.)Published Jun 1, 2023Checked Oct 13, 2026

   “This Selected Issues paper explores the link between social grants and employment in South Africa. Social grants have played an important role in alleviating poverty and inequality in South Africa. The literature has analyzed the link between social grants, means-tested and unconditional on employment, and employment in South Africa. The country’s social grant expenditure is relatively large amid persistently high unemployment. This study uses a large panel household survey spanning a decade to find that old age and disability grant recipients are less in employment as intended by the social program, consistent with the literature. The study adds to the literature by showing that, among “indirect recipients,” younger members typically have lower employment prospects than other indirect recipients. There could be various explanation for this finding, including that the youth are more discouraged from seeking jobs, face larger constraints in the labor market, or have less job opportunities.”

2. 2

   South Africa Carbon Pricing and Climate Mitigation Policy

   Selected Issues Papers (Qu et al.)Published Jun 1, 2023Checked Oct 13, 2026

   “Meeting South Africa’s ambitious climate objectives will require a comprehensive strategy that includes a more effective use of carbon pricing policy, reducing inefficient government subsidies that have delayed the green transition, well-targeted support to affected industries and households, and other green financial and sectoral measures. Implemented well, the mitigation policy package would promote low-carbon investments, raise government revenues, and support economic growth.”

3. 3

   An Evaluation of the World Economic Outlook Forecasts

   IMF Working Paper (Timmermann)Published Mar 1, 2006Checked Oct 13, 2026

   “The World Economic Outlook (WEO) is a key source of forecasts of global economic conditions. It is therefore important to review the performance of these forecasts against both actual outcomes and alternative forecasts. This paper conducts a series of statistical tests to evaluate the quality of the WEO forecasts for a very large cross section of countries, with particular emphasis on the recent recession and recovery. It assesses whether forecasts were unbiased and informationally efficient, and characterizes the process whereby WEO forecasts get revised as the time to the point of the forecast draws closer. Finally, the paper assess whether forecasts can be improved by combining WEO forecasts with the Consensus forecasts. The results suggest that the performance of the WEO forecasts is similar to that of the Consensus forecasts. While WEO forecasts for many variables in many countries meet basic quality standards in some, if not all, dimensions, the paper raises a number of concerns with current forecasting performance.”

4. 4

   World Economic Outlook, April 2021

   International Monetary Fund eBooks (Dept.)Published Apr 1, 2021Checked Oct 13, 2026

   “The global economy is climbing out from the depths to which it had plummeted during the Great Lockdown in April. But with the COVID-19 pandemic continuing to spread, many countries have slowed reopening and some are reinstating partial lockdowns to protect susceptible populations. While recovery in China has been faster than expected, the global economy’s long ascent back to pre-pandemic levels of activity remains prone to setbacks.”

5. 5

   The impact of a fuel levy on economic growth in South Africa

   Journal of Energy in Southern Africa (Ncanywa & Mgwangqa)Published Mar 23, 2018Checked Oct 15, 2026

   “Government expenditure is one of the factors that could influence economic growth and it depends on borrowing or on the amount of tax revenue. A fuel levy, as an excise tax charged on petroleum products such as petrol, diesel and biodiesel, can be an important source of revenue for the government. It can, however, be a burden on fuel consumers. The present study, as an effort to address this controversy, used the vector autoregressive approach to examine the impact of fuel levies on economic growth in South Africa. The results showed a long-run unidirectional negative relationship between economic growth and fuel levy. The conclusion was that the economy needs to grow at a higher rate so as to boost tax revenues and public expenditure. Strong revenue collection, therefore, depends on highly increasing economic growth and efficient tax administration. The implication of a growth-oriented tax system is to minimise distortions created by the tax system and create incentives for drivers of economic growth.”

6. 6

   The economic consequences of a fuel levy reform in South Africa

   South African Journal of Economic and Management Sciences (Mabugu et al.)Published Jun 17, 2011Checked Oct 15, 2026

   “This paper assesses the economic effects of a hypothetical fuel levy imposed by South African provinces. The welfare effects of increasing the fuel levy by 10 per cent are negative but very small. Similarly, the marginal excess burdens for efficiency and equity (poverty) are quite low, suggesting much smaller impacts of the intervention on both economic activity and equity. Furthermore, a fiscal policy reform that raises fuel levy by 10 per cent is progressive as it has stronger negative effects on higher income households than the lower income households. A potential source of instability for the macroeconomy and total government revenue is the negative effect on economic activity induced by the fuel levy increase. The remedies suggested are that policymakers should make tax room elsewhere in the intergovernmental fiscal system to accommodate the fuel levy increase.”