From grey list to growth: how South Africa is shaping up for 2026

Over short periods, markets can be unpredictable, and 2025 was no exception.

- 

ADRIAAN Pask, Chief Investment Officer at PSG Wealth, considers how to balance investment risks and rewards in the year ahead.

(by Pexels)

We expected a volatile year, and that has certainly played out.Nobody anticipated a placid administration out of the US or a quick resolution to any of the geopolitical tensions, but there have been some surprises on both fiscal and monetary fronts - both domestically and abroad - that signal where markets may be heading and where volatility could emerge.

Not all of these surprises have been negative.

The rand has performed far better than many expected, and South Africa's removal from the Financial Action Task Force (FATF) grey list in October has helped reduce perceived country risk. Alongside incremental improvements at some of our key state-owned enterprises, this has begun to build momentum that could carry through into 2026.

While exchange-rate movements are often viewed through a purely South African lens, much of the recent strength in the rand has also been driven by dollar weakness.

Global central banks have been reducing their exposure to US Treasuries while increasing gold holdings - a shift that has weighed on the dollar and, in turn, supported emerging-market currencies, including the rand.

Importantly, this dollar weakness is now being reinforced by improving domestic fundamentals.

Eskom's latest results point to a strengthening financial position, and while Transnet has been a significant stumbling block, early signs of recovery are beginning to emerge as volumes start to pick up.