South Africa navigates economic stabilization and institutional reform

South Africa is navigating a period of economic stabilization and institutional reform. The government has adopted the ‘Weaver Work’ scenario from the Indlulamithi Scenarios 2035 framework as its preferred path for the Medium-Term Development Plan 2024–2029, focusing on cooperation to rebuild institutions.

Recent indicators show progress, including a period of over 440 consecutive days without load-shedding and a GDP growth of 0.5% in the first quarter of 2026. Additionally, the country has exited the FATF greylist and received ratings upgrades from S&P and other agencies.

However, significant economic challenges remain. Growth forecasts for 2026 are projected at 1.5%, debt is approximately 77% of GDP, and unemployment remains above 30%. The upcoming 2026 Medium-Term Budget Policy Statement, scheduled for October 21, is expected to focus on fiscal stabilization rather than major breakthroughs, with attention on SARS collections and the public sector wage bill.