SA’s economy in best shape in decade – Standard Bank

South Africa’s economy has entered its strongest phase in 10 years and could see growth accelerate if efforts to clear its infrastructure backlog gain traction, according to an economist at the continent’s largest bank by assets.

Africa’s biggest economy has moved into a more constructive growth phase, Standard Bank Group chief economist Goolam Ballim said at a media event on Tuesday.

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That’s been supported by improved sentiment following its first sovereign credit-rating upgrade since 2005, the stability of a coalition government formed in 2024, and reforms that have boosted the performance of key utilities such as power and ports, he said.

“South Africa faces its best macroeconomic backdrop in a decade,” Ballim said, adding that greater focus on water security and infrastructure is helping shift the economy from steady expansion towards what could be the start of a compounding growth phase.

After more than a decade of stagnation, South Africa’s economy is forecast to have expanded 1.2% in 2025 and is expected to advance 1.4% this year and reach growth of 2.1% by 2028, according to the lender.

South Africa’s improving outlook is also being underpinned by a firmer rand, helped by a weaker dollar and a surge in commodity prices that has lifted returns for the country’s globally significant mining sector.

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Surging gold and platinum prices have boosted earnings at producers such as Gold Fields and Valterra Platinum, adding another tailwind to an economy emerging from years of weak growth.

This year won’t be a “miracle”, but it can build momentum, Ballim said.

If reforms are locked in, political obstacles don’t again derail progress and policymakers coalesce around a more coherent agenda, South Africa could see the kind of medium-term growth it hasn’t enjoyed in about a decade, he said.

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