Five economic and business factors to watch for SA in 2026

Commodity prices

Gold’s price smashed new records in 2025, reaching over $4,000 an ounce – double the price it was fetching just two years before. Over the course of the year its price surged over 60%, its biggest annual gain in over four decades. And a combination of global political/economic uncertainty and robust central bank buying should keep prices elevated in 2026.

South Africa, which once accounted for close 80% of global output, is no longer the world’s top gold producer – it’s not even in the top 10. But it still has a material impact on the economy, with export receipts from this bull run lending support to the rand. It can also swell the Gold and Foreign Exchange Contingency Reserve Account of the South African Reserve Bank (Sarb), providing a potential lifeline to the Treasury to lower borrowing costs.

Read more: Analysis: The silver rally is all about heat and is getting hotter

Unlike gold these days, South Africa is the undisputed world heavyweight champion producer of platinum group metals (PGMs), and these prices have also rocketed in 2025, albeit from depressed levels. Platinum’s price soared almost 150% to $2,300 an ounce by Christmas Eve, but in the last week it lost some ground.

It is still over double the price it was fetching a year ago, a trend mirrored by palladium. The price of rhodium also doubled to more than $9,000 an ounce. A range of factors explain this rebound including tightening supplies, a mending global economy, and the growing traction of hybrid vehicles that require more platinum in their catalysts than diesel or petrol vehicles.

If this momentum can be maintained in 2026, it will also have a material effect on the South African economy with marginal shafts spared from closure and previously stalled investments made in new production.

Inflation — and its new target

Sarb has made monetary policy interesting again! The slashing of its mandated inflation target to an effective 2% to 4% from 3% to 6% promises to be a game changer that should mean lower inflation and interest rates in the long run. Consumer price inflation has been cooling and was 3.5% on an annual basis in November.

The Sarb has said that it remains “... on track to deliver 3% inflation over the medium term”. Inflation has a corrosive impact on household incomes and business costs, with implications for the wider economy. Containing it at lower levels in line with South Africa’s trading partners is crucial.

FMD vaccination drive

The announced drive to vaccinate South Africa’s national cattle herd from foot-and-mouth disease in the wake of crippling outbreaks will test the capacity of the state to rise to the occasion. The herd includes about 7.2 million head of cattle on commercial farms and around five million on communal land.

Public/private partnerships will be key as state-run animal vaccine producer Onderstepoort Biological Products is a shell of its former self. The stakes are high and not just for the price of steak. Livestock and poultry together account for about half of South Africa’s agricultural economy and nipping the outbreaks in the bud is vital.

Fiscal pressures

In the Medium-Term Budget Policy Statement (MTBPS) government debt was forecast to stabilise in 2025/26 at 77.9% of GDP, up slightly from 77.4% previously. Building on the positive momentum of the S&P credit rating upgrade, which came after the unveiling of the statement, will require this target remaining firmly in place.

That in turn will require the government to reduce needless expenditure and economic growth to meet the Treasury’s forecasts of 1.2% for 2025 with an average of 1.8% for the next three years. This is hardly a muscular pace but the Treasury has consistently forecast growth at faster rates than what transpires, a state of affairs that worsens the debt-to-GDP ratio.

Eskom, Transnet — and water shedding

The vast improvement in Eskom’s performance lit the way to the S&P upgrade and it will be of more than passing interest to see if it can keep the lights on in 2026. Prospects on this front look bright, not least because the rollout of renewables by the private sector continues at breakneck speed.

The latest South African Renewable Energy Grid Survey sees a pipeline of 220 GW of projects. A key reason behind this drive is Eskom’s escalating tariff rates. There is a vicious cycle at play here with Eskom losing market share among paying customers while unpaid municipal debt mushrooms.

Meanwhile, the rot at Transnet seems to have been stemmed, but it is not out of the woods yet and analysts say that among other things it needs to slash its wage bill.

And while Eskom has stabilised, there are local outages galore and water shortages have emerged as a key risk to the economy. At least most provincial dam levels are brimming – there are notable exceptions in some areas such as in the Eastern Cape – and this summer promises the rains of La Niña. The problem is that a full dam is not of much use if the water can’t get to customers because of collapsing infrastructure. DM