What to expect for the SA economy in 2026
As the year comes to a close, which trends could shape your financial planning in 2026? Here is what you need to know about South Africa’s economic outlook for the year ahead.
1. Growth momentum builds
South Africa’s economic expansion is set to gain traction in 2026, with the SARB forecasting 1.4% growth – a step up from this year’s estimated 1.2%. The foundations for this acceleration are becoming clearer: more reliable electricity availability and enhanced logistics infrastructure are enabling businesses to scale production with greater confidence.
Beyond our borders, the global environment remains supportive. Major trading partners are projected to deliver solid performances, with the IMF expecting the euro area to grow by 1.1%, the US to expand by 2.1%, and China to achieve 4.2% growth. These markets represent critical destinations for South African goods, though ongoing tariff negotiations – particularly affecting vehicles and agricultural products bound for America – remain a consideration for exporters, and a risk factor for the economy.
2. A new inflation anchor
South Africa has entered a new chapter in monetary policy. In the Medium Term Budget Policy Statement, Finance Minister Enoch Godongwana set a 3% inflation target, developed in close coordination with the SARB and National Treasury. It is more than just a change to a headline number.
With a 1% tolerance band, the new framework aims to anchor lower inflation expectations across the economy. That is good news for businesses planning capital investments and for households managing monthly budgets. Softer food and energy costs should support this lower-inflation backdrop through 2026. Lower inflation also means better real return on investment.
3. The easing continues
With inflation tracking closer to its new target, monetary policy is set to remain accommodative. Following November’s 25 basis points reduction – which brought the total 2025 cuts to 100 basis points – the SARB is expected to deliver another 50 basis points of relief in 2026, provided inflation stays well-behaved.
This sustained easing cycle creates a more favourable backdrop for wealth building. Lower borrowing costs reduce the expense of credit, while shifts in relative valuations across bonds, property, and other rate-sensitive assets open up tactical opportunities for portfolio positioning.
4. Currency strength persists
The rand's resilience has been one of 2025's notable developments, with the currency gaining 8% against the dollar since January. This appreciation has delivered tangible benefits by lowering the cost of imported goods and helping to anchor inflation at more favourable levels.
The driver behind this trend is primarily broad dollar weakness rather than rand-specific factors. US inflation concerns linked to tariff policies, combined with elevated commodity prices stemming from geopolitical tensions, have pressured the greenback across multiple currencies. There is market consensus that the Rand will maintain stability around the R17/$ level as these dynamics persist, providing a natural hedge against imported price pressures.
However, currency movements remain inherently unpredictable. A well-diversified portfolio that includes offshore assets provides essential protection against Rand volatility, particularly for investors with foreign spending obligations or those seeking to preserve wealth across different economic scenarios. Strategic foreign exchange management through regular offshore contributions, rather than attempting to time market movements, helps smooth out currency fluctuations and reduces the risk of concentrated rand exposure during periods of unexpected weakness.
5. Equity markets deliver
South African stocks have had a standout run, with the JSE All Share Index up 35% from January through November. Mining companies did much of the heavy lifting, helped by gold pushing above $4,000 an ounce as investors looked for safety in a jittery world.
Looking to 2026, the forces behind the safe-haven demand – trade tensions, conflict in the Middle East, and the war in Ukraine – don’t appear to be fading, which should keep support in place for precious metals. Beyond resources, better governance under the Government of National Unity has lifted confidence in the reform agenda. And the municipal elections scheduled for late 2026 could add another catalyst if they deliver improvements in service delivery and signal policy continuity.
The takeaway
As we head into 2026, South Africa's fundamentals look firmer, and the macro backdrop is more stable. A steadier electricity supply, easing inflation, supportive monetary policy, and improving governance are coming together to create a constructive environment for wealth planning.
We will continue to monitor external risks – especially tariff developments – but the domestic trend is moving in the right direction. Our team is focused on turning these broad shifts into practical strategies tailored to your goals and risk tolerance. This is an opportune moment to reassess your financial positioning. We recommend scheduling a portfolio review to ensure your asset allocation reflects both the improved domestic outlook and the need for diversification. Key considerations include evaluating offshore exposure for currency risk management, reviewing year-end tax efficiency opportunities, and ensuring adequate liquidity to capture emerging opportunities.
Standard Bank Private provides comprehensive support across these areas – from structuring offshore investments and foreign exchange strategies, to optimising estate and tax planning. Our wealth advisors work alongside specialists to develop integrated solutions that respond to both market conditions and your personal circumstances, translating macro tailwinds into meaningful financial outcomes.