SA’s economic outlook for 2026: Opportunities and challenges ahead

THE SA economy has ended 2025 in a stronger and better position than it was a year ago. In the past few months, a number of positive developments have created what could be a turning point in the business cycle.

- PROF RAYMOND PARSONS

Based on the latest data available, the economy enters 2026 on a "note of caution optimism" about the outlook for next year. SA has indeed been in an economic recovery phase this year, and a cumulative set of favourable factors promises better economic traction in 2026.

SA's economic fundamentals therefore look firmer, and the groundwork for durable growth is being laid. In the third quarter of 2025, the economy showed its fourth consecutive rise in economic activity, albeit off a low base. The GDP growth forecast for next year is now about 1.5%, inflation is projected to be close to the 3% inflation target; and interest rates are expected to decline further. Energy and logistical constraints are being gradually eased.