SA economy to enter 2026 with cautious confidence: NWU Business School

The North West University Business School said the policy uncertainty index has eased to 64.9 from its record high of 81 in the third quarter of the year.

Although still in negative territory, positive factors over the past three months have outweighed the negative factors.

The North West University Business School said the fourth quarter calibration suggests the economy may have reached a turning point.

In the third quarter of the year, the economy showed its fourth consecutive rise in economic activity, although off a low base.

Other positive factors include the 1.6% rise in fixed capital formation, a well-received Medium-Term Budget Policy Statement, South Africa’s removal from the greylist, and the revision of the inflation target to 3%.

While still unacceptably high, overall unemployment was lower in the third quarter at 31.9%, compared to 33.2% in the previous quarter.

As the year 2025 draws to a close, the overall world economy has proved surprisingly resilient in recent times, having coped with shocks ranging from high interest rates, geopolitical conflicts, and aggressive US tariffs.

The North West University Business School said past reforms, especially in emerging markets, have helped countries to successfully manage a rapidly changing global landscape.

Although countries have been seeking to diversify their economies and to manage trade disruptions, the global outlook remains clouded.

The North West University Business School said the domestic economy also enters 2026 on a note of cautious optimism.