The clearest message from the International Monetary Fund (IMF)’s October World Economic Outlook is that the world economy is holding up. The Fund forecasts global growth of 3.1% this year and 3.4% in 2027. A war in the Middle East has pushed up fuel and food prices, yet most of the world has absorbed the blow.
Most of the world.
Because it has so few strong shock absorbers and an economy that has been in idle for years, South Africa hasn’t been able to absorb the hits nearly as well. This is nowhere clearer than in the Fund’s output per person data. The numbers remove population growth from the picture and the gauge is the nearest thing the Fund publishes to a measure of whether the average person is getting richer.
South Africa’s output per person fell 0.5% in 2023 and 0.8% in 2024, then rose 1.0% in 2025. The Fund expects a fall of 0.2% this year and a rise of 0.1% in 2027. Our calculation from those figures is that the average South African will be about 0.4% poorer at the end of 2027 than at the end of 2022.
Over the same five years however, world output per person rises about 12.6%, which is roughly an eighth. Brazil’s rises about 11.5% and Nigeria’s about 9.6%. This year alone, output per person grows 6.1% in India, 4.7% in China, 2.1% in Nigeria and 1.8% in Brazil.
The Fund explains who is doing well: countries with little direct exposure to the war and strong links to the technology boom are seeing activity hold up or strengthen. Energy exporters outside the conflict zone benefit from better prices. Energy importers with little link to technology are in the worst position; facing higher import bills, pressure on their currencies, weaker real incomes, and less room for the state to help.
On the back foot
South Africa imports most of its fuel and has little place in the technology supply chain. The effects show in the prices: diesel cost R31.95 a litre on 7 October, 74% above its January price. Based on Central Energy Fund data to 8 October, petrol prices are expected to increase again in November. The Reserve Bank raised the repo rate to 7.25% in September, while the Fund expects inflation of 4.4% this year, up from 3.2% in 2025, and unemployment of 33.2%, up from 32.4%.
The Fund’s growth forecast for South Africa is 1.0% in 2026 and 1.3% in 2027. But drill into the numbers and we don’t think even 1.3% will be met. That’s because the Fund expects growth of only 0.6% from the fourth quarter of 2025 to the fourth quarter of 2026, and then a relative jump of 2.2% in 2027. That increase requires a sharp rise in spending on new buildings, machinery and equipment — in other words, gross fixed capital formation. But this spending still sits at just 14% of GDP, against the 30% target in the National Development Plan.
The harshest data point from the IMF is as follows. On annual growth, the gap between South Africa and the world is not widening. It was 2.4 percentage points in 2025 and is 2.1 in 2026 and 2027. But it does not have to widen for the average South African to see and feel the impact in their daily life. A gap of two points a year, repeated every year, is how a country ends up poorer than its peers. After five years the gap is not 2 points — it is 13.
Raising investment is the only way out. That means private companies building and running more of the country’s power stations, rail lines and ports. It means a Reserve Bank that is not left to fight inflation alone while the state squeezes growth from the other side, by raising administered prices year after year. It also means local governments that keep water and sewage systems working. The 4 November local elections will decide who runs many of them.
The world is not waiting. The Fund expects it to be an eighth richer by the end of 2027 than it was at the end of 2022. South Africans will be 0.4% poorer. That is the number the government should be asked to explain.
