South Africa’s fragile economic recovery is coming under renewed pressure.
South Africa’s fragile economic recovery is coming under renewed pressure, with Reserve Bank governor Lesetja Kganyago warning that a combination of higher global uncertainty and weaker household spending is expected to slow growth over the next two years.
While the South African Reserve Bank’s decision to raise interest rates dominated headlines on Thursday, the central bank also delivered a warning that the economy’s recent momentum is fading as geopolitical tensions, higher oil prices and rising inflation weigh on households and businesses.
The Reserve Bank lowered its economic growth forecasts to 1.2% for 2026 and 1.7% for 2027, citing weaker consumer spending and softer investment as households and businesses contend with higher costs and increased uncertainty.
“Before this shock hit, the economy seemed to be gaining momentum, with the incoming data mostly positive,” Kganyago said. “Now, however, we face a painful combination of higher global uncertainty and reduced disposable income.
