The National Treasury has significantly downgraded its economic growth forecast for 2025 to 1.2%, a reduction from the 1.4% projection announced in the May budget speech. The announcement, made during the Medium-Term Budget Policy Statement (MTBPS), has sparked immediate concern over the country’s ability to tackle its severe unemployment crisis.
Alongside the revised 2025 figure, the Finance Department projected that real GDP growth will average 1.8% between 2026 and 2028. However, this modest medium-term outlook has been met with skepticism from social advocates who argue it falls critically short of what is needed.
In a swift reaction to the policy statement, representatives from the organization Youth Capital expressed deep disappointment, stating that the level of growth outlined is insufficient to create the jobs required, particularly for the youth.
Sibabadwe Nobanja of Youth Capital highlighted that the statement came a day after the release of unemployment statistics showing a year-on-year increase in youth joblessness. He voiced frustration that the MTBPS failed to directly address this escalating crisis.
“We were initially just disappointed by the fact that there was not any mention of young people within this budget, and when it comes to unemployment, there was only one mention about unemployment,” Nobanja stated.
He noted that while the budget focused on infrastructure and managing national debt, it lacked a clear plan for how these measures would lead to increased investment in the youth or skills development.
“The ideal reaction would have been to acknowledge that youth unemployment is a crisis,” Nobanja said. “It would be great to see that the budget would be allocated in a way that would envision investing in youth as investing in the people of South Africa, as investing in the economy as well.”
The criticism underscores a growing concern that the government’s economic plan does not adequately connect fiscal policy with the urgent need to create opportunities for South Africa’s young population, where unemployment remains at critically high levels.
