South Africa’s economy is expected to grow faster than it did in 2024, but the World Bank is still warning that the rebound is too soft to shift the big issues like unemployment and poverty.

Growth Outlook Inches Up

In its latest Global Economic Prospects report, the World Bank estimates South Africa’s economy expanded by 1.3% in 2025. That is an improvement from 2024, which is put at 0.6% in the same reporting.

Looking ahead, the World Bank’s forecast sees growth rising slightly to 1.4% in 2026 and 1.5% in 2027.

What’s Driving the Uptick

The World Bank links the stronger 2025 number to a more reliable electricity supply, a strong agricultural harvest and improving business confidence toward the end of the year.

It also says private consumption and private investment should remain the main engines of growth, supported by efforts to improve how public money is spent and to ease supply-side constraints.

Why Recovery Still Looks Fragile

Even with the upward drift in the forecast, the World Bank cautions that growth at these levels remains well below what is needed to absorb new entrants into the labour market, bring down unemployment or meaningfully reduce poverty.

The report also flags external trade risks. It points to uncertainty around the African Growth and Opportunity Act after its late-2025 expiry date and notes that shifts in global trade policy can hit demand and confidence.

What to Watch Next

The World Bank’s message is basically: the direction is better, but the pace is not enough. For South Africans, the real test will be whether ongoing reforms in energy and logistics and rising public investment can translate into stronger private investment and broader job creation.