Nedbank Group says domestic demand contracted through the 5 months to the end of May 2026, hurt by inventory rundowns, a relapse in fixed investment and a “marked” slowdown in consumer spending.
Nedbank Group earnings guidance for 2026 remains on track even though geopolitical tensions and trade disruptions have weighed on confidence and investment through the first five months of the year.
The bank said in an update Wednesday that the operating environment in South Africa was mixed in the 5 months - GDP growth surprised on the upside in the first quarter, expanding 0.5% quarter on quarter, but domestic demand contracted through the period due to inventory rundowns, a relapse in fixed investment and a “marked” slowdown in consumer spending.
The bank now expects 2026 GDP to grow by 1.3%, revised down from the 1.5% forecasted by the bank in February. Inflation would likely rise to around 4.6% in June, before easing to about 3.2% by year-end, as global oil prices have reduced in recent weeks after the US and Iran reached an agreement to end hostilities and reopen the Strait of Hormuz.
Industry-wide credit extension strengthened modestly, with private sector credit growth rising to around 9% year-on-year in April 2026. Corporate credit growth accelerated into double digits, driven by increased activity in general loans, although demand was sensitive to weak business confidence and subdued fixed investment.
