South Africa’s medium-term prospects brightening

The fallout from the energy shock will delay but not derail a cyclical recovery in South Africa. Growth is likely to accelerate more than most expect in 2027-28 and this will be accompanied by a much lower path for interest rates than is priced into financial markets. Further ahead, recent progress on structural reforms makes us optimistic that growth rates of 2%+ can be sustained over the medium term. That would be the fastest growth recorded since the post-Global Financial Crisis recovery.