We expect South Africa's GDP growth will rise to an average of 1.5% over 2025-2028 after a subdued 0.6% in 2024, but ongoing logistical bottlenecks and global tariff-related pressures will constrain economic activity. Disagreements with coalition partners around hiking the value-added tax (VAT) forced the government to amend and re-table the budget for fiscal 2025 (fiscal year ending March 31, 2026); it will be presented for the third time on May 21. Despite the significant disagreements, the coalition government of national unity (GNU) has managed to remain intact, which we believe bodes well for broad policy continuity and enhanced reform momentum. Despite the re-tabling of the budget and the likely removal of VAT, the government plans to continue with fiscal
