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South Africa Enters 2026 on Cautious Optimism With 1.5% Growth Outlook and Softer Inflation

Economists flag the need for structural reforms to convert recent gains into job‑rich growth.

Overview

  • Consensus points to roughly 1.5% GDP growth in 2026 with inflation near a 3% anchor and further rate declines expected, with Moody’s guiding to about 1.6%.
  • Record gold prices and a stronger rand capped 2025, with the currency around R16.63 to the dollar after starting the year near R18.88.
  • Confidence was bolstered by a well‑received MTBPS, South Africa’s removal from the FATF grey list, and an S&P credit upgrade.
  • Energy and logistics constraints are reported to be easing, and economic activity notched a fourth consecutive quarterly increase in 2025.
  • Economists say faster structural reforms, higher fixed‑capital investment, and improved investor confidence are essential, with over R1.8 trillion in corporate cash yet to be mobilised.