Mar 12, 2025 MIBCO, the Motor Industry Bargaining Council, Dr Clement Moyo, Ntiyiso Consulting, MISA
President Trump’s decisions will influence the economic forecast for South Africa
A slight yet positive increase in South Africa’s economic growth is on the cards over the next few years, but US President Donald Trump might throw a spanner in the works.
Dr Clement Moyo, economist of Ntiyiso Consulting, predicts that the US won’t renew the African Growth and Opportunity Act (AGOA) after lapsing in September, which will have a detrimental impact on vehicle exports. “South Africa exports vehicles to the value of R1,9 billion (22%) to the US, creating 86 000 direct jobs and 125 000 indirect jobs in other industries thanks to AGOA,” says Moyo.
He presented an economic forecast on the country and specifically the automotive- and retail motor industries to MIBCO, the Motor Industry Bargaining Council, at the pre-bargaining conference held in Kempton Park earlier today. “Global economy has been suffering since the Covid-19 pandemic with limited economic growth and a sharp rise in inflation. In 2024 the world’s economic growth was 2,7%. It is predicted that Trump’s sweeping 25% tariffs on all metal imports to the US will have a massive impact.
“South Africa’s economic growth was a mere 0,6% in 2024. The forecasted economic growth for 2025 and 2026 is 1,8%, 2% in 2027 and 2,1% in 2028. This means that South Africa’s Gross domestic product (GDP) is too low to achieve any of the country’s social economic growth strategies to help alleviate unemployment,” says Moyo.
According to him Trump’s tariffs are expected to result in a rise in inflation from its current 3,2% to 4,5% in the fourth quarter of this year. “Inflation is a killer to economic growth.”
The Automotive Sector contributed 5,3% to GDP in 2023, of which the retail motor industry contributed 2,1%. Vehicles are considered luxury goods, hence sales are heavily influenced by inflation and high interest rates. Moyo explained that the 900 000 vehicles sold in 2024 amounted R362 million in revenue, an additional R123 million in components sold. The industry employs 304 723 employees of which 8% are foreigners with scares skills.
This economic forecast presentation be shared with all parties in MIBCO before the first round of the wage and substantive negotiations starts on 10 April 2025. MISA will submit the demands of its members on 1 April.
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