How South Africa's economy is recovering amidst political uncertainty
Economy
South Africa’s economy is “projected to grow moderately,” with GDP expected to increase from an expected 1.2% in 2025 to 1.5% in 2026.
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SOUTH Africa’s economy is “projected to grow moderately,” with GDP expected to increase from an expected 1.2% in 2025 to 1.5% in 2026, as estimated by the Reuters Econometer for November.
This is according to a new report, *Economies At A Glance*, which outlines a detailed calendar of economic events and provides forecasts for major global economies.
The report highlights a year of measured easing cycles, fiscal consolidation, and geopolitical risks, with growth stabilising across developed markets while emerging Asia remains the engine of global activity.
This moderate improvement is attributed to “easing monetary policy, progress in reforms to improve electricity availability, and the reduction of logistics bottlenecks will support investment and consumption”.
The report, however, notes: “Political risk is rising ahead of the 2026 local government elections, with voter sentiment sensitive to poor service delivery outcomes and economic conditions. Potential shifts in municipal control could affect policy continuity, particularly in areas responsible for utilities and infrastructure, adding uncertainty for investment and local governance.”
The consensus view on inflation, according to the Reuters Econometer, is that headline inflation is expected to “rise from 3.3% in 2025 to 3.6% in 2026, partly due to base effects, before easing to again to an expected 3.4% in 2027”.
The calendar reveals several critical South African dates for 2026, including the SA gross domestic product (Q4 2025) release on March 10, the State of the Nation Address on February 12, and the National Budget later in February.
Interest rate decisions by the SA Reserve Bank (SARB) are scheduled throughout the year, including late January, March, May, July, September, and November 2026. The highly anticipated local government elections are set between November 2026 and January 2027.
The United States economy is described as having proved resilient through 2025, supported by strong AI-driven investment, solid household consumption and fiscal stimulus.
The Bloomberg median consensus expects growth to stabilise at 2% in 2026. Headline inflation is expected to “remain slightly above the Federal Reserve’s 2% target through mid-2026. The Fed is likely to continue a measured easing cycle,” though “fiscal policy remains a concern, with high structural deficits and a rising debt ratio.”
Europe is facing moderation, with the Bloomberg consensus expecting growth to “moderate from around 1.4% in 2025 to 1.1% in 2026”. Inflation is “likely to settle near the European Central Bank’s 2% target as wage pressures ease”, with monetary policy expected to “remain broadly neutral, with the deposit rate steady at 2%”.
In the UK, economic activity is “set to remain subdued,” with GDP growth expected to “fall from an expected 1.4% in 2025 to 1.1% in 2026 as fiscal consolidation continues to weigh on household incomes”. Inflation, however, is forecast to drop from 3.4% in 2025 to “2.5% in 2026”, aided by “softer energy and food prices”.
Japan’s strong expansion in 2025 is set to halve, with GDP growth easing to 0.7% in 2026. The Bank of Japan is expected to raise its policy rate gradually toward 1% by the end of 2026.
Throughout 2026, central bank interest rate decisions will dominate the global calendar, with regular meetings scheduled for the US Federal Reserve, European Central Bank, Bank of England, and Bank of Japan in April, May, June, July, September, October, and December.
Globally, the Bloomberg consensus expects growth to hold steady at 4.1% in 2026: “South Asia again the strongest performer, supported by India’s resilient consumption and investment. Aggregate global inflation is expected to ease to 2.7% in 2026,” which “supports continued, though slower, rate-cutting cycles in major markets.”
China’s post-pandemic rebound is “flattening out”, with growth forecast to ease to 4.5% in 2026 as the payback from this year’s trade-in programme dampens consumption and the long real-estate correction continues to weigh on investment”. “Monetary policy in China should stay supportive as inflation stabilises, while fiscal policy is expected to become more expansionary.”
A significant preliminary global event scheduled is the “COP31” conference, set for November 9-20, 2026. The year 2026 also includes several major elections, such as the “Uganda presidential election” in January, the “Peruvian presidential election” in April, and the “United States midterm election” in November.
The report concludes with a disclaimer that the information is derived from third-party sources.