South Africa’s economic future looks more positive in 2026 than it has for some time. The South African Reserve Bank (SARB) has forecast a modest increase in GDP growth – up from 1.2% in 2025 to 1.4% this year.

The improved growth has been driven in part by a more reliable electricity supply and some progress on granting the private sector access to freight rail networks, which will help to finance upgrades to logistics infrastructure. With a cautious optimism taking hold, what other domestic and international trends might set the economic tone this year? 

Global outlook

The International Monetary Fund (IMF) has projected 1.3% growth for the Eurozone in 2026. The IMF also expects the US, another of SA’s important trading partners, to grow by a modest 2.1% and China by 4.5%. These are the major destinations for South African goods, although the instability of the US tariffs regime under the current administration remains a risk for South African vehicle and agricultural exports. However, all the complications introduced by the war in Iran, which began after the IMF projections, have yet to be factored into the picture.

Current US trade and foreign policy have created uncertainty in global markets, including the possibility of a different set of global trading alliances and relationships. Such a realignment might also present opportunities for the South African economy. SA continues to produce commodities that are strategically important to global markets. This is an advantage when investors are looking to diversify away from traditional US assets and into emerging markets. Our interest rates have been cautiously eased, resulting in our national 10-year bond yield returning 35% – one of the strongest global performances.

Positive economic and investment trends

• Inflation
  Our most recent Medium-term Budget Policy Statement set a lower inflation target of 3%, with the blessing of SARB. This will mean a better environment for businesses planning capital investment – and for your household budget, which will now be helped by lower inflation of food and energy costs.  
   

• National monetary policy
  SARB is expected to cut interest rates by another 50 basis points during 2026, which will lower borrowing costs, especially for home and vehicle loans, and make credit less expensive across the board. 

• Financial and currency performance
  SA was recently removed from the Financial Action Task Force grey list and received a sovereign credit-rating upgrade. Private-sector involvement in the rail and port infrastructure sector is beginning to progress, and these monetary and policy shifts are having positive effects.
  
  The rand had its strongest year since 2009, and this trend seems to be persisting, particularly in its gains against the US dollar. This lowers the cost of imported goods and helps keep inflation down.
  
  On the stock markets, South African stocks have been strong for most of the year, driven by mining stocks, as gold reached more than $5,000 an ounce. South African markets are seen as safe havens away from global turmoil, especially since our governance and national utility picture has improved, hopefully for the foreseeable future.    
   

• Logistics infrastructure
  Rail and ports have shown definite signs of business and infrastructure improvement. Private operators have been selected to operate 41 routes across 6 rail corridors, which should significantly expand the capacity and reliability of the national rail network. These operations are scheduled to start in the second half of 2026 and will increase capability and reliability for our large export markets sectors, including mining and agriculture.
  
  Privatised port concessions have also been in place for some time, with outsourced capacity at our busiest export container port, Durban Container Terminal 2, and at the liquid-bulk terminal in Cape Town harbour.
   

On many fronts, 2026 looks more positive. Despite the turmoil and upheaval in the US and other parts of the world, our macroeconomic fundamentals are looking more positive than they’ve looked for some time. A more reliable electricity supply, positive inflation figures, and a supportive monetary policy are creating a more conducive environment for wealth and business investment.

Given that the existing macroeconomic fundamentals are in place, it’s a good time to invest in your small or medium business. We’re here to help with guidance, support, and structured finance and investment plans.