Economic update

South African Macroeconomic Outlook

South Africa at a crossroads: Navigating global turbulence and domestic economic challenges

South Africa’s economic outlook remains mixed as global geopolitical tensions, particularly in the Middle East, continue to fuel energy market volatility and heighten uncertainty across financial markets. While inflation has eased and the extension of AGOA provides a positive boost for trade relations with the United States, economic growth remains fragile, with the economy contracting in the second quarter of 2026 amid weakness in mining, manufacturing and trade. At the same time, global risks, higher fuel prices and tighter financial conditions are placing renewed pressure on businesses and consumers.

The report highlights a divergent operating environment for business leaders. Resilient vehicle sales, a stronger trade surplus and ongoing reform momentum offer reasons for cautious optimism, while soft business confidence, subdued investment activity, manufacturing weakness and increasing political and social pressures continue to weigh on growth prospects.

Looking ahead, organisations will need to closely monitor inflation, interest rates, exchange rate volatility and global geopolitical developments as these factors increasingly shape investment decisions, consumer demand and long-term economic performance. For sectors such as retail, consumer products, infrastructure and financial services, maintaining agility and resilience will be essential in navigating an environment characterised by both emerging opportunities and elevated risks.

EY Parthenon releases a monthly economic outlook. You can access the full September 2026 South African Macroeconomic Outlook here.

If you would like to obtain this monthly, please reach out to Mandi Bezuidenhout.

“South Africa’s economic outlook remains fragile amid global volatility and domestic growth challenges.”

Geostrategic Analysis

Navigating a fragmented world: Geopolitics, power shifts and the new rules of global business

As geopolitical uncertainty continues to reshape the global operating environment, businesses are facing an increasingly complex landscape defined by shifting power dynamics, evolving trade and technology governance, and growing competition for strategic resources. In this latest geostrategic analysis, EY explores how middle powers are leveraging global forums such as BRICS and the United Nations to expand their influence, contributing to a more fragmented international order and creating new challenges for organisations operating across jurisdictions.

The report also highlights key developments affecting global investment and growth, including the rising importance of energy security in supporting AI-driven infrastructure, divergent regulatory approaches to sustainability and technology, and regional geopolitical developments in Brazil, the Middle East and Africa.

With social unrest, supply chain disruption and economic pressures continuing to influence business decisions, organisations are encouraged to strengthen resilience, enhance scenario planning and monitor emerging risks that could impact operations, investment strategies and long-term growth. The insights provide business leaders with a valuable perspective on navigating uncertainty while identifying opportunities in an increasingly multipolar world.