SA’s 2026 economic outlook - a dance of geopolitics and growth

LAST year was punctuated by a strong rand, falling interest rates, record highs on the stock market, gold and other precious metals.

- ADVOCATE LAVAN GOPAUL

FOR the first time in recent memory, South Africa is a 'buy' for investors seeking stability in an otherwise volatile emerging market basket, given the complex global geopolitics of South America, Eastern Europe, and the Middle East, says the writer. | KAREN SANDISON Independent Newspapers

Could this fairy tale conclusion continue into the new year?As we navigate the first week of 2026, the global and domestic economic landscapes present a paradox of “green shoots” fighting against a collective of structural and geopolitical risks, with Venezuela added to the troubles in Ukraine and the Middle East.

For the first time in a decade, South Africa is no longer the “sick man” of emerging markets. Yet, the global stage upon which we trade is becoming increasingly fragmented and unpredictable.

For years, the South African story was one of “unrealised potential” strangled by energy deficits and logistical bottlenecks, corruption and weather disasters. While we have not solved all these problems, as we enter 2026, the data suggests a pivot.

While the IMF remains cautious, forecasting South Africa’s GDP growth at a modest 1.1% to 1.6%, local sentiment is more optimistic. We are seeing a “normalisation” of the growth trajectory.

Inflation has settled remarkably well, averaging between 3.1% and 3.4% — neatly tucked into the lower half of the Reserve Bank’s target range.

This disinflationary trend has allowed the SARB to pivot toward a more accommodative stance, with the repo rate expected to move toward the 6% mark by 2027.