BofA maintains South Africa's GDP growth forecast, sees potential for interest rate cuts.

Bank of America analysts maintain a positive outlook on South Africa's economic growth, forecasting a rise of 1.6% this year. This prediction comes after a challenging year where real GDP growth fell short of expectations at 0.6%, despite improvements in electricity supply and the establishment of a new National Unity Government in June 2024.

Looking ahead to 2025, BofA anticipates a better economic environment driven by increased domestic investment and consumption, though they caution that risks remain tilted downward. High-frequency data has yet to show a definitive upward trend, and industrial production exhibits mixed signals, indicating that more time is needed for growth to stabilize at higher levels. Meanwhile, inflation is expected to remain below the South African Reserve Bank's target of 4.5% until at least Q3 2025.