The credit rating agency attributed the revision to global policy uncertainty and escalating trade tensions, which have prompted downward adjustments to growth forecasts worldwide.

Global credit rating agency Moody’s has revised downward its economic growth forecasts for a number of G20 countries. It now projects US GDP growth at 1.0% for 2025, with a slight uptick to 1.5% in 2026.

For China, Moody’s forecasts growth of 3.8% in 2024, followed by 3.9% in 2026, a significant slowdown compared to the 5.4% growth recorded in the first quarter of this year.

Looking at SA specifically, a Senior Economist at Standard Bank, Elna Moolman, says Moody’s expectation of 1.5% growth this year still looks on the higher side.

“The new Moody’s forecast for SA growth this year is still a little bit higher than ours in the medium term, premised on ongoing reforms to support economic growth.”

Another economic observer also echoes that 1.5% growth for South Africa sounded a bit too optimistic, expecting National Treasury to downwardly revise a number of key economic estimates at the forthcoming Budget 3.0, especially in light of the International Monetary Fund slashing its growth forecast for the country to 0.8% for the year.

Economist at Anchor Capital Casey Sprake says, “We think third budget 1.5% huge implication on revenue streams for SA, It ultimately boils down to the simple fact that South Africa is an economy with both growing output and a growing population.”

The feeling is that the continued uncertainty, particularly around trade policy, will likely drag global growth down for the foreseeable future, while at the same time, there are concerns that inflation may tick up due to supply constraints brought about by the trade tensions.

--SABC--