IMF downgraded South Africa’s GDP growth outlook to 1.0% for 2026 in the April 2026 World Economic Outlook Update. Treasury’s projected 1.6% growth estimate announced in February 2026, is an important assumption underpinning the R1 trillion infrastructure programme, and a lower growth outlook therefore materially weakens the sector’s delivery outlook. While the overall pipeline remains large on paper, slower growth constrains fiscal space, limits revenue collection, and increases pressure on already stretched public finances, shifting the focus from expansion to prioritisation. In practice, this is likely to result in delayed rollout, continued underspending (particularly at municipal level), and a widening gap between budgeted infrastructure and actual construction activity. Delivery will increasingly favour economically enabling, bankable projects in energy, logistics and bulk water, where private sector participation can be leveraged, while socially driven and fiscally dependent infrastructure faces heightened risk of postponement. This is likely to have a more dire impact on local governments solely or largely dependent on government transfers. While the lower GDP outlook will not collapse the infrastructure pipeline, it may fundamentally change the quality and delivery profile.
