South Africa's economic outlook for 2025 signals promising salary gains ahead for workers.
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Looking ahead to 2025, the economic outlook indicates that the salary gains seen in 2024 could continue to strengthen, according to the BankservAfrica report.
The report said that on the economic front, real GDP growth is forecasted to rise by 1.7% in 2025, somewhat higher than in 2024.
The increase in growth will be driven by a combination of factors, including:
- Improved household consumption expenditures
- Higher fixed investment spending
- Further advances in structural reforms.
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A continuous focus on improving the electricity generation capacity of the country, addressing the supply chain blockages associated with freight rail and port operations, as well as upgrading water infrastructure, among others, are much-needed actions to boost the economy forward.
Elize Kruger, an independent economist said: "The anticipated improvement in the business environment is expected to enable companies to offer more substantial salary increases in 2025, which in combination with a moderate inflation environment, could mean a second consecutive year of a real increase in take-home pay."
However, if the 2025 National Budget had been tabled with the 2% VAT (Value Added Tax) hike, it would have hindered the positive inflation outlook somewhat, biting into the fragile recovery in the purchasing power of salary earners.
"While we await the revised budget on March 12, the postponement has introduced uncertainty, raising concerns about its potential impact on the economy’s recovery prospect," Kruger said.
The BankservAfrica’s Take-home Pay Index has revealed that the average take-home pay rose to R18,098 in January 2025, reflecting the positive developments in the earnings landscape.
Shergeran Naidoo, head of Stakeholder Engagements, BankservAfrica said: "The average take-home pay rose to R18,098 in January 2025, compared to R17,246 in December 2024 and R15,564 one year earlier."
The upward trend in average salaries started in 2024, and while there was some monthly volatility, nominal take-home pay continues to tick higher, according to BankservAfrica.
According to Naidoo, in real terms, take-home pay also rose to R15,659 in January 2025, a 12.8% hike year-on-year and reached its highest level since February 2022.
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