SA’s economic recovery remains fragile
South Africa's economic recovery remains fragile after nearly two decades of weak growth, with GDP per capita in 2025 below its 2007 level. Recent developments, including improved electricity supply and removal from the FATF grey list, have shifted sentiment and helped lower borrowing costs.
South Africa faces a narrow window to escape long-term stagnation or remain trapped in low growth. The country's GDP per capita in 2025 remained below its 2007 level, making it the only BRICS economy to have lost ground over nearly two decades. Key constraints include the failure of the electricity system, a distorted labour market, weak capital formation, and deteriorating public finances. Recent improvements in electricity supply and removal from the FATF grey list have shifted sentiment. The World Bank's $350-million credit-guarantee vehicle is expected to unlock up to $10-billion in private infrastructure investment. The next 12 to 24 months are crucial for structural reforms to achieve sustained, inclusive growth.
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