South Africa's economy 2026 outlook: GDP and job growth forecast
As South Africa approaches 2026, economists unpack the challenges and opportunities that lie ahead for the economy in the new year.
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South Africa is poised for significant economic growth in the coming years, provided it takes advantage of the current conditions and makes adjustments to its policies.
This is the view of some economists following revelations that South Africa will end this year on a higher economic note compared to last year.
According to Prof Raymond Parsons of the North-West University Business School, the country must urgently boost investor confidence and accelerate structural reforms if it is to achieve the higher, job-rich growth needed to address its deep socioeconomic challenges.
He posted on social media, “The South African economy enters 2026 on a note of cautious optimism. 2026 must build on firmer economic foundations laid this year. A GDP growth rate of 1.5% in 2026 is still considered too low. Durable, job-rich growth now depends on much higher levels of fixed capital investment. A 2026 boost in investor confidence is needed.”
“We should all aspire to be a proverbial ‘abominable growthman’ for the South African economy in 2026. We know (1) foundations exist for better growth of 1.5% next year (2) but for well-known reasons, growth must be much higher (3) so, 2026 must see a pivot in the implementation of growth-friendly policies.”
Economist Dawie Roodt said conditions are ripe for South Africa at the moment, stating, “All the conditions are right for the country to grow, growth at a rate that could create jobs.”
While the country will end on a higher economic note this year, the situation will be more of the same next year; the economy might grow at the rate of 1%. The current economic gains will not filter to the real economy where people could see themselves getting jobs.
He noted that a lot of things had gone right, leading to the country doing much better economically than before. These include inflation targeting, lower interest rates, the weakening of the dollar, the strengthening of the rand, lower oil prices, and higher gold prices, along with the aggressive nature of the South African Revenue Service to collect from all taxpayers. “These have been really good for South Africa; some of these have been policy changes, but some have been pure luck,” he said.
Roodt emphasised that South Africa needs to address the issue of macroeconomic policies that are putting investors off. “People want to invest in the country, but we need to address the issue of macroeconomic policies. Some of these policies, like the expropriation act, are hindering growth as they create the perception that property could be stolen. If the issue of the ANC macro could be addressed to attract investors, then we could see real growth where the economy could grow at 5%, and then we can see jobs being created,” he said.
Professor Bonke Dumisa conceded that things are improving, stating, “The economy is not where we want it to be, but it is far better than what we had last year and even two years ago.
“For the first time in a long time, we are certain that South Africa is not going to have a technical recession. The rand has gained against the dollar and is the strongest it has been for some time. The gold prices are high despite the fact that we are no longer the biggest producer of gold; we still command a lot of respect in that area.”
He added that the performance of the economy had defied the challenges brought by those expecting South Africa would suffer as a result of tensions with the USA, “Such is a result of financial inflow into the country; global investors do not put their money in a sinking ship.”