South Africa’s economy has now recorded six consecutive quarters of growth, expanding by 0.5% in the first quarter of 2026.
South African consumers are likely to face another difficult six months, as higher fuel costs, elevated interest rates and slowing economic momentum squeeze household finances even as the economy continues its gradual recovery.
PwC’s latest mid-year economic update forecasts GDP growth of around 1.2% in 2026, broadly in line with the South African Reserve Bank’s expectations. But the professional services firm says the recovery is becoming increasingly fragile as rising global costs filter through to businesses and consumers.
“South Africa’s economic recovery is holding, but it is becoming increasingly uneven and fragile,” said Lullu Krugel, chief economist and Africa sustainability leader at PwC South Africa. “While domestic conditions have improved, the economy is now facing renewed pressure from rising costs and global uncertainty.”
PwC said the biggest shift in the outlook over the past six months has been the impact of rising geopolitical tensions in the Middle East. Higher oil prices have increased South Africa’s fuel import bill, weakened the rand and lifted transport and energy costs across the economy. Inflation has subsequently risen to 4% after reaching a low base last year, prompting the Reserve Bank to raise interest rates to 7% in May.
