South Africans are more confident than they have been in quite a while. Things could well be looking up for South Africa, with narrowing unemployment and modest economic growth. Inflation is set to stabilise towards the end of the year, interest rates are coming down, and the rand has settled within a more predictable range.
Gross domestic product (GDP) grew by 0.5% in the three months to September, down from 0.8% in the previous quarter. Economists remain cautiously optimisticthat South Africa will end the year with growth slightly above 1%. Investec analyst Lara Hodes had anticipated a marginal 0.3% growth, with Investec expecting around 1.3% for the year, in line with the South African Reserve Bank and slightly above National Treasury forecasts.
PSG Financial Services chief economist Johann Els is more confident. Els added that “growth may even come out closer to 1.4%. While that remains weak, it is still an improvement on the 0.5% recorded in 2024.” Hodes noted that consumer sentiment improved in the fourth quarter.
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“Consumer sentiment was less negative in the fourth quarter,” she said, reflecting the more positive mood captured by recent indicators. Recent steady quarterly gains suggest the economy is becoming more resilient. This improvement is supported by declining inflation, reduced interest rates, and the initial stages of an investment rebound.
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