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Despite the volatile global economic conditions, the South African economy is now growing with growth project close to 2%, the Rand being stronger and investment showing a rebound in the recent fiscal quarter.
The Governor of the South African Reserve Bank (SARB) Lesetja Kganyago; announced on Thursday, 29 January 2026, that the Monitory Policy Committee (MPC) has decided to pause the monitory policy rate at 6.75%.
The Governor told the nation that the MPC’s decision was influenced by a number of economic factors, both global and domestic. He said last year was marked by extreme global uncertainty, and 2026 has begun with a new round of shocks. Geopolitical tensions remain elevated, reflecting what appears to be a rupture in the global political order. There are also new threats to central bank independence.
“Markets are jittery, and precious metals like gold have received safe-haven flows. There are also on-going risks of an Artificial Intelligence (AI) bubble. Furthermore, global imbalances have become very large. For instance, China’s trade surplus was over a trillion dollars last year, a new record. Meanwhile, government debt is still growing fast in key economies, with the US fiscal deficit, for example, approaching two trillion dollars. These trends are not sustainable.
Despite these fragilities, asset prices have been resilient and global growth is holding up, supported by investments in AI, as well as fiscal stimulus in major economies. Inflation generally slowed last year, and many central banks have had space to adopt more neutral policy settings. Financing conditions for emerging markets remain benign,” said Kganyago.
Amid all the global uncertainty, the South African economy is showing some steadiness. According to Kganyago, the economy grew steadily for four consecutive quarters; and in the recent quarter, it grew more rapidly. He says this is the longest unbroken growth phase since 2018.
“The main growth driver has been household consumption, up by more than 3% last year, compared to an estimated 1.3% for the overall economy. Unfortunately, investment has been weak, contracting during the first half of 2025. However, the third-quarter data showed a rebound. We hope this investment recovery will be sustained, allowing the economy to achieve structurally higher growth.
Our forecasts continue to show growth moving somewhat higher, approaching 2% over the medium term. We see some upside risks to these projections,” said the optimistic Governor.
“Against this backdrop, the MPC decided to keep the policy rate unchanged, at 6.75%. Two members favoured a cut of 25 basis points, while four preferred a hold,” announced Governor Lesetja Kganyago.
