Standard Bank optimistic about SA sustaining economic momentum, highlights risk factors

Standard Bank has released its detailed 2026 Economic Outlook, examining what is changing in the global economy, and in the South African context what also still needs to change to ensure growth momentum.

Stephen Grootes speaks to group chief economist Goolam Ballim about the expectations for 2026 as global power shifts, interest rates ease and growth remains uneven.

Looking at the growing impact of geopolitics, Ballim notes that this is no more a background risk but is at the core of influencing economic and financial outcomes.

"We always take cue from the US, whether it is at the direction of its financial markets, or the Federal Reserve's interest rates, and now of course we're taking cue from the US with respect to geopolitics.... and Donald Trump as we know, over the last year especially, has accelerated 'muscular' diplomacy - this sense where rules, institutions and multilateralism have eroded and been replaced by, dare I say, power and coercion."

For South Africa, 2025 can be described as a year of many milestones which can prove a good legacy for 2026, Ballim says. However, he highlights 'deep dismay' on the streets of the country particularly with public services.

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"While we can celebrate what happens in the boardroom, it can jar with what's happening on the street... There is, generally, dismay with an incapacitated state and the slow pace of job creation on the back of so far still a tepid economy."

At the same time, 2026 presents the best potential in a decade for South Africa, with the anchoring of the reform agenda, he says.

"It is continuing to galvanise, and hopefully we'll also see this around water, the way it organised around electricity and logistics."

"We're also recognising that the macroeconomic cycle - meaning the pace of real wage growth, employment growth, credit conditions in the market, and the buoyant stock market - all coalesce to suggest that there's a good push behind consumer spending, which accounts for about two thirds of GDP. Also, we believe fixed investment is going to accelerate this year after contracting over the last two years."

What is critical though, is our politics and the stability of the governing coalition, Ballim says.

"It is typical that politics bedevils the SA outlook - we're going to have local government elections within a year, which is going to again reshape the coalition dynamics at a local level."

To accelerate our growth into 3% and beyond over the next few years, the critical factor is overarching governance, or the rule of law, Ballim believes.

The economist outlines what he thinks we need from President Cyril Ramaphosa's upcoming State of the Nation Address (SONA).

"If the President were to harness the zeitgeist of the moment, in my view he should focus on two things : How we are going to remedy the incapacitated state with emphasis on municipalities and metros, and then how to deal with this penetrating web of criminalisation that has infested South African civilian life and certainly the authorities."

"If he's able to show resolve in terms of the triggers coming out of the Madlanga Commission and the Parliamentary inquiry, I think those interventions can provide the confidence that's needed for us to get to a higher growth plane where businesses believe the reform agenda is now leaning into these critical new areas of resolution."

Scroll up to the audio player to hear more insight from the Standard Bank chief economist