Simple statistical filters for estimating the output gap (a measure of economic slack) suggest that it remains in positive territory. Our filters suggest that potential growth has picked up marginally to just below 1.1%, implying an output gap of just over 0.2% based on the latest GDP data. The SARB’ MPC projections from the January 2026 MPC (before the 2025Q4 data were published) also assumed potential growth at 1.1% for 2025 but curiously they estimated an output gap for 2025 of -0.2 percentage points (for more on what’s wrong with the SARB’s output gap estimates see here) . We will publish updated estimates and comparisons once GDP for 2026Q1 is published today.
