Stronger national coalition dynamics and an improving market hint at a brighter future, although political uncertainties loom on the horizon. A little bit of optimism can be a dangerous thing. But for the first time in many years there is reason to believe that there will be important positive changes for South Africa in 2026.
Unfortunately the outlook for 2027 is slightly different.Looking back to the start of the year there were many reasons to believe we would end up worse in December than we were in January. The national coalition looked shaky, and had yet to even discuss, let alone pass, a budget. There was consistent public speculation that some factions in the ANC would force Cyril Ramaphosa out as President, with the possible consequence of ending the coalition and inviting Julius Malema and Jacob Zuma into government.
While load shedding had receded, there was no certainty yet that it would not return, while mining companies complained that Transnet was still not delivering enough coal to the coast. And US President Donald Trump was preparing to enforce what was feared would be crushing tariffs that would affect our economy. Now, in December, we find ourselves in a much better position than in January.
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A massive and sustained jump in the gold price has brought a huge amount of money into the country, and looks set to do this for some time. Tied to that, platinum prices have finally moved up, meaning more money is coming into that sector. Inflation, a dynamic that can lead to so much fear, frustration and often political change, seems destined to remain low for the foreseeable future.
The national coalition looks stronger now than at any time since its formation. Crucially, it appears that all of the parties have now recognised that this government is making progress. As a result they have a stake in maintaining that progress. The more progress that is made the stronger the incentive for them to remain together.
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