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Research Notes are more in-depth analyses undertaken by BER economists and consultants.
Brief note intended as a more regular interface with our clients.
The Impumelelo Economic Growth Lab is a unit at the BER, focussing on generating policy-relevant work and capacity building to achieve economic success in South Africa. Our work is open to all registered users of our website.
Real GDP growth eased to 0.5% q-o-q in 2025Q3, exactly in line with our forecast, our high-frequency tracker, and market consensus. This marks the fourth consecutive quarter of positive quarter-on-quarter growth (from 2024Q4 through 2025Q3). If GDP also increases in 2025Q4, it would be the longest uninterrupted run of quarterly expansions since before 2018.
Read MoreThe Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) saw the scope to cut the policy interest rate by 25bps without risking its path to achieve the 3% inflation target over time. The decline brings the repo rate to 6.75% (prime at 10.25%).
Read MoreThe 2025 medium-term budget marks a significant fiscal milestone in that Finance Minister Enoch Godongwana has grasped the 3%-inflation target baton passed by the SA Reserve Bank (SARB) after prevaricating for several months. The Treasury expects debt to stabilise this year, while acknowledging that there will be some short-term mixed reactions to the government's finances resulting from the target change.
Read MoreAfter a streak of disappointing GDP releases, it was a welcome surprise to be wrong on the downside – i.e. GDP came out better than we and the consensus expected in 2025Q2. From a technical perspective, this warrants an upward revision to our full-year view, but we remain worried about what could sustain growth going forward. That said, seeing a quarterly uptick in private investment in Q2 was encouraging.
Read MoreIn a unanimous decision, the South African Reserve Bank’s (SARB) Monetary Policy Committee (MPC) announced its decision to cut the repo rate by 25bps to 7% (prime to 10.5%) at today’s meeting, in line with our expectations. In a significant move, the Governor announced that the MPC will aim for the bottom of the 3-6% target range – effectively moving ahead without a formal announcement of a lower inflation target by the National Treasury.
Read MoreDuring its May 2025 interest rate decision, the SA Reserve Bank (SARB) published a 3% target scenario - a clear inflexion point in the SARB's posture. We think the time for a shift to a lower target may have arrived. But clarity, credibility, and coordination will be critical. In this Comment, we describe some risks and unpack the often-overlooked fiscal dimensions in more detail.
Read MoreIn this interim forecast update, we have lowered our GDP forecast. This follows disappointing Q1 GDP data, revisions to historical data, and signs that the economy is losing momentum.
The SA economy expanded by just 0.1% q-o-q in 2025Q1, a slowdown from the (downwardly revised) 0.4% expansion recorded in 2024Q4. The downward revision to Q4 means that the economy performed even weaker than initially estimated in 2024.
Read MoreThe Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) decided to cut its repo rate by 25bps to 7.25% (prime to 10.75%). We expected a split decision, so the dovish tilt with all six members voting for a cut (and one even preferring a 50bps cut) was surprising.
Read MoreBudget 3.0 had the difficult task of balancing the books without the proposed VAT hike plus a deterioration in the economic backdrop. As such, it provides a sobering reality check on SA’s macro and fiscal position.
Read MoreA major theme that emerged from the annual BER conference held in Johannesburg earlier this week is that South Africa’s growth prospects are faltering as the economy is buffeted by huge uncertainty caused by both the Trump administration’s tariff tantrum and rising concern about local political stability.
Read MoreThe withdrawal of the VAT increase from the 2025 Budget means there will be a R75bn revenue shortfall over the medium term. The big question now is: where to cut expenditure? The BER believes that one of the best places to look for savings is among the extra-budgetary funds and public entities that are not directly controlled by the National Treasury or subject to statutory appropriation by parliament. Some of the largest spending increases are hidden in this less examined part of the fiscal framework.
Read MoreWith Trump's reciprocal tariffs kicking in this morning (SA time), financial markets remain volatile and the US-China tit-for-tat trade war is escalating at a rapid pace.
Budget 2.0 does not appear to be going through Parliament particularly easily, raising the possibility of Budget 3.0. Messy parliamentary budget processes are not particularly unique from an international perspective, but they are new territory for South Africa. In this comment, we update our Budget 2.0 preview and conclude that, without a deal (which remains possible), Budget 3.0 is increasingly likely.
Read MoreIn line with our expectations heading into the meeting, the Monetary Policy Committee (MPC) of the SA Reserve Bank (SARB) opted to keep the interest rate unchanged. The decision was likely a close call, reflected in split votes by MPC members. The repo rate will remain unchanged at 7.5% (prime at 11%).
Read More“Must be an interesting time to be an economist, hey?” I can’t recall how often someone has said that to me since the middle of last year, and particularly since the beginning of this one. And they are not wrong – but it is a real challenge to distinguish legitimate signals from noise during these ‘interesting times’.
Read MoreAfter originally being scheduled for 19 February and then postponed at the last moment, the National Budget for 2025 was tabled by the National Treasury (NT) on 12 March. This is not to say it will be a done deal from here, the DA has already indicated that it will not support the Budget in its current form. The next important date is 2 April, when we will have a clear sense of Parliamentary support.
Read MoreThe 2025 Budget, which was supposed to be presented on 19 February, was postponed to 12 March. At the time of writing, it is unclear whether the Government of National Unity (GNU) has reached an agreement on the budget's content. Indeed, it is not impossible for the Budget to be postponed again. In this Comment, we outline a set of scenarios.
Read MoreAccording to Stats SA, the economy expanded by 0.6% q-o-q in 2024Q4. This is below what we, and the consensus, expected ahead of the release. The lower-than-expected Q4 print means that full-year growth also undershot expectations and came in at just 0.6%.
Read MoreThe 19 February 2025 Budget was never tabled, but the embargo on the content of the budget documentation has been lifted. This allowed us to model the budget's impact had it been implemented. This comment provides a short summary of the implications for the key macro variables.
Read MoreA copy of the slides presented by Prof Abel Esterhuyse during a BER client webinar on 25 February 2025.
The Budget Speech has been postponed, for the first time. Ahead of the Budget, rumours indicated that there would be significant tax increases including a VAT increase of up to two percentage points. Our initial view is that the postponement will create a wobble in the Government of National Unity (GNU). However, it shows that the smaller political parties are able to exercise leverage, which could be positive for reform in the longer run.
Read MoreFinance Minister Enoch Godongwana will table the National Budget on Wednesday, February 19, 2025. This comment briefly previews the key things we will be looking out for next week.
This brief presentation-style overview provides an update on the electricity tariff increases granted by NERSA on 30 January and the Income & Expenditure Survey 2022/23 published by Stats SA on 28 January, as well as the expected implications for the BER’s consumer inflation forecast and monetary policy outlook.
Read MoreDuring the first meeting of 2025, the Monetary Policy Committee (MPC) of the South African Reserve Bank (SARB) decided to lower the repo rate for a third consecutive meeting by 25bps, to 7.5%. Even more than before, the SARB focused on the upside risks to inflation—especially over the medium term, which is deemed more uncertain than usual.
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