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According to a recent PwC economic outlook report, South Africa’s economic prospects for 2025 are intricately tied to the fortunes of its key trading partners.
Global economic growth is expected to decline from 2.8% this year to 2.6% in 2025. South African businesses must now demonstrate reliability and export market potential to attract foreign investment.
Despite fears of economic uncertainty, trade with the US is forecast to grow by 1.8% in 2025. A survey revealed that 74% of US executives believe the November election could significantly alter their business strategies, with half anticipating increased foreign investments under a potential Trump administration.
The potential imposition of 10-20% import tariffs could pose challenges, particularly for South African exports of metals and ores, including platinum, aluminium, and ferroalloys.
In the eurozone, modest real GDP growth of 1.2% is anticipated; meanwhile, China and India emerge as particularly promising markets, building on their relationship in the BRICS alliance. China, South Africa’s largest trading partner, is expected to maintain solid growth at 4.5% in 2025, with high-tech manufacturing performing robustly.
The report also underscores a global trend towards “slowbalisation”, where countries prioritise national resilience through onshoring and nearshoring production strategies. For South Africa, this could mean increased regional collaborations, such as its growing dependence on Mozambique for port and energy services.
Domestically, the formation of the Government of National Unity (GNU) has sparked optimism. Financial markets have responded positively, with the Johannesburg Stock Exchange gaining 15.2% in the third quarter and the rand appreciating.
According to the Bureau for Economic Research, targeted reforms in energy, logistics, and crime could potentially boost South Africa’s real GDP growth to 3.3% in 2025, potentially creating 470,000 jobs and reducing unemployment to 31.4%.
Lullu Krugel, PwC South Africa’s chief economist, said, “Global economic and geopolitical developments directly impact business decision-making, which in turn affects trade and investment in South Africa.”
