On 11 February 2026, the National Treasury issued a media statement following the release of the International Monetary Fund (IMF) Article IV Consultation with South Africa, which was held from 01 to 08 December 2025. As prescribed in the IMF’s Articles of Agreement, the surveillance function requires the IMF to consult with each member country at least once a year to conduct economic and financial assessments.
The IMF staff met with the South African Government, the South African Reserve Bank (SARB), Eskom, Transnet, business, organised labour and academia, amongst others. The outcome of their consultations is summarised in an Article IV Staff Report, which the IMF Executive Board considered on 09 February 2026.
IMF findings
The IMF notes that the South African economy has proven resilient to the higher global policy uncertainty experienced in 2025, owing to its ample natural endowments, independent institutions, and strong monetary policy framework. The IMF expects South Africa’s economic growth to reach 1.3% to 1.4% in 2025-2026, rising gradually to 1.8% in the medium term, supported by ongoing structural reforms. Inflation is projected to reach the 3% target by the end of 2027. While exports remain hampered by tariffs and global trade policy uncertainty, strong commodity prices are supporting export receipts in the near term. Fiscal deficits are moderating but still elevated.
Risks to the outlook remain tilted to the downside, driven by heightened geopolitical tensions, escalating trade measures, prolonged policy uncertainty, and potential delays in implementing structural reforms.
Against this background, the IMF recommends:
- A credible, growth-friendly, and politically and socially feasible adjustment to stabilise public debt and rebuild buffers, while protecting priority spending;
- Continued monitoring of financial stability risks, including those related to the bank-sovereign nexus;
- Improving access to finance, especially for SMEs (Small and Medium Enterprises);
- Accelerated structural reform implementation, including ongoing electricity and logistics reforms.
Government’s response
The National Treasury expresses appreciation for the constructive engagement with IMF staff and broadly shares the staff’s assessment of macroeconomic and financial performance, including the key policy issues for addressing economic challenges.
Since the 2024 Article IV consultation, South Africa’s medium-term outlook has strengthened. The 2025 Medium Term Budget Policy Statement (MTBPS) highlights that the government is pressing ahead with the implementation of structural reforms through Operation Vulindlela, which continues the steady work of reforming the key network industries – energy, freight, logistics and water – and reforming the visa system to attract tourism, skills and investment. The Operation Vulindlela progress report for the third quarter of 2025/26 has been published. It sets out key milestones achieved between October and December 2025 across seven reform focus areas. The ongoing reforms implemented during OV phase II are advancing effectively to encourage investment and lower unemployment rates. Recent data indicate a slight decline in unemployment, suggesting positive momentum in reform efforts.
The 2025 MTBPS also underscores the South African Government’s commitment to fiscal sustainability, even in a low-growth environment. Medium-term spending continues to protect the social wage, education, health, community development, social protection and jobs programmes. Furthermore, the MTBPS reaffirmed the South African Government’s commitment to debt stability, demonstrated by consistent fiscal discipline that has achieved the primary surplus for two consecutive years and is projected to continue in future years.
The South African Government has options for a formal fiscal anchor to help ensure public finances remain sustainable over the long term. A formal policy proposal will be announced in 2026.
South Africa’s removal from the Financial Action Task Force (FATF) Grey List in October 2025 and an S&P Global credit rating upgrade (BB- to BB) in November 2025 mark significant gains for the country, business confidence, and investment. The FATF decision was the fruit of extensive collaboration between government departments and the financial sector to strengthen the country’s anti-money laundering regime. The sovereign risk premium, and consequently the outlook for borrowing costs, has improved significantly during 2025.
The finance minister will deliver his National Budget Speech on 25 February 2026, where more information will be provided.
Conclusion
The National Treasury is committed to safeguarding the country’s macroeconomic stability, with a specific focus on strengthening the credibility of the fiscal framework, reducing debt to a sustainable level, increasing financial stability, and enhancing the implementation of reforms to boost productivity. A copy of the full staff report can be retrieved from the IMF website www.imf.org or the National Treasury website www.treasury.gov.za.