Economic update

South African Macroeconomic Outlook

Pockets of resilience support South Africa’s economic outlook

South Africa’s economy continues to show encouraging signs of resilience, supported by stronger consumer activity and improving business sentiment. Retail sales strengthened to 3.4% year-on-year, domestic vehicle sales remained robust, and the Absa PMI returned to expansionary territory in September. The trade surplus also widened, signalling areas of underlying strength in the economy.

While manufacturing and exports remain under pressure, domestic demand continues to hold up better than production. Importantly, continued reform momentum and growing private-sector interest in infrastructure are supporting the medium-term outlook and creating opportunities for investment and growth.

Looking ahead, South Africa’s recovery remains uneven, but resilient consumer demand, improving sentiment and continued structural reform provide important areas of support.

For consumer-facing sectors such as retail, resilient demand provides a positive foundation, while continued agility will be important as the economic outlook evolves.

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

If you would like to obtain this monthly, please reach out to Brigette van Os.

“Resilient consumer demand, improving sentiment and continued reform momentum are supporting South Africa’s medium-term outlook.”

Geostrategic Analysis

Navigating geopolitical and economic uncertainty

Geopolitical, climate and technological shifts continue to reshape the global business environment. In the October 2026 Geostrategic Analysis, EY explores key developments that could influence business risk, investment decisions, supply chains and operations.

This edition examines the potential impact of an intensifying El Niño on food production, logistics networks, energy systems and economic resilience through 2027. It also looks at how private equity investors are increasingly directing capital towards resilient sectors, including energy, digital infrastructure, advanced manufacturing and defence-related assets, amid AI disruption and geopolitical uncertainty.

For South African businesses, the analysis also considers the implications of the country’s local government elections, with municipal infrastructure, service delivery, governing stability and execution capacity highlighted as important considerations for business operations and investment.

As organisations navigate these interconnected challenges, scenario planning, supply chain resilience and a greater understanding of geopolitical exposure will remain important to building long-term resilience.