South Africa’s Economic Outlook: Resilient but Not Flourishing
South Africa’s economic outlook, as reflected in forecasts submitted by participating economists of the BMR/Unisa Economist of the Year Competition, remains broadly stable despite a highly uncertain global environment. The forecasts nevertheless point to an economy still under pressure, constrained by weak employment growth, slightly higher inflation expectations and persistent global uncertainty.
The August consensus forecast for South Africa’s real GDP growth remains unchanged at 1.2% for 2026, reinforcing the view that the economy remains on a low-growth trajectory. Furthermore, economists revised inflation slightly higher, expect employment growth to weaken further, and remain sharply divided over the future direction of oil prices and the rand.
Economic outlook: July 2026 vs August 2026
A Steady Growth Outlook, But Pressure Is Building Elsewhere
The August forecasts suggest that economists still expect the South African economy to grow at a very low pace. The 1.2% GDP growth forecast was unchanged from July, as were expectations for household expenditure, the prime lending rate and global economic growth.
However, several indicators point to continued strain. Inflation expectations increased from 4.2% to 4.3%, while expected employment growth declined from a very low 0.6% to an even lower 0.5%. Brent crude oil expectations rose from US$75 to US$77 per barrel, reflecting continued geopolitical risk and concerns about global oil supply.
There were also some positive revisions. Economists expect the rand to strengthen modestly, from R16.50/$ in July to R16.40/$ in August, while long-term government bond yield expectations eased from 8.60% to 8.51% and the expected current account deficit narrowed from 0.8% to 0.7% of GDP.
Overall, the August forecast results suggest that South Africa is maintaining a degree of resilience but is still not generating the stronger growth and employment gains required for a more convincing and inclusive economic recovery.
What Is Influencing Economists’ Forecasts?
The motivations provided by participating economists reveal a clear divide in expectations.
A prominent concern remains geopolitical uncertainty, particularly the conflict in the Middle East and the potential disruption of oil supplies through the Strait of Hormuz. Several economists warned that prolonged instability could keep oil prices elevated, increase domestic fuel and transport costs, lift inflation and reduce the likelihood of interest-rate relief.
Domestically, economists pointed to weak fixed investment, subdued consumer purchasing power, ageing infrastructure, poor service delivery and persistent labour-market weakness as important constraints. Political uncertainty ahead of the municipal elections was also raised as an additional domestic risk.
At the same time, some participants expressed a more optimistic view. They expect possible de-escalation in the Middle East, increased oil production, a weaker US dollar and a stronger rand to help ease inflationary pressures locally. Some participants also pointed to the relative resilience of the services sector as a factor that could provide modest support to the outlook.
The result is a highly uncertain forecasting environment, with economists divided not so much on the direction of economic growth but on the scale of the external risks that could influence inflation, oil prices, interest rates and the rand.
A “Resilient But Not Flourishing” Economy
Ms Jacolize Meiring, EoY Adjudicator, summarised the August results as follows:
“Overall, the August results support a ‘resilient but not flourishing’ narrative. While the consensus forecasts remain relatively stable, the qualitative comments reveal a sharply divided risk outlook. Several participants remain concerned that prolonged Middle East hostilities, potential disruption to oil supplies through the Strait of Hormuz, and local political uncertainty could lift fuel prices, inflation and interest rates. In contrast, a more optimistic group anticipates de-escalation, increased oil production and a stronger rand. This divergence is most evident in the wide Brent range of $65 to $95 per barrel and the exchange-rate range of R15.50/$ to R18.05/$.”
Expert Perspective
According to Professor Carel van Aardt, Project Lead of the BMR/Unisa Economist of the Year Competition, the August results underline the importance of distinguishing economic resilience from stronger structural recovery.
“The August consensus confirms that South Africa is holding its ground, but the economy remains vulnerable on several fronts. Inflation risks are edging up and the labour market remains weak, with employment growth expected to ease further. Continued structural reform, policy certainty and investment in key growth enablers remain essential if South Africa is to move from resilience towards stronger, more inclusive and job-rich growth.”
The Value of The BMR/Unisa Economist of The Year Competition
The BMR/Unisa Economist of the Year Competition continues to provide a unique monthly view of how economists assess South Africa’s changing economic landscape.
By tracking ten key macroeconomic indicators and combining consensus forecasts with qualitative expert insight, the competition offers a valuable benchmark for businesses, policymakers, investors, researchers and households.
Professor Deon Tustin, CEO of the Bureau of Market Research, says the competition’s value extends well beyond identifying the most accurate forecaster:
“The BMR/Unisa Economist of the Year Competition provides South Africa with a unique, independent and evidence-based view of where the economy is heading. By combining leading expert forecasts with their insights on key risks and opportunities, the competition offers businesses, policymakers, investors and households a valuable benchmark to support informed decisions and a more resilient economic future.”
Through this combination of forecasting excellence, expert interpretation and public engagement, the competition continues to strengthen economic understanding and contribute to better decision-making across South Africa.
