The rules-based global order that supported trade and investment for decades continues to erode. In its place, a more transactional framework is emerging—one where market access, capital flows, technology, and commodity dependencies are increasingly negotiated through geopolitical bargaining.

This shift changes the forecasting challenge: the key question is not only which economy grows faster, but which actors hold the strongest strategic levers—including trade access, energy exports, capital markets, technology ecosystems, and critical raw materials—and how willing they are to use them.

Key volatility triggers include:

• Renewed trade conflict or abrupt tariff shifts
• Populism and political fragmentation affecting fiscal and regulatory choices
• Dependence on critical raw materials and strategic supply chains
• Political pressure on institutional independence, notably central banks

The central outlook is for moderate global growth, with some near-term cooling followed by improvement later in the year. Resilience reflects a combination of:

• Front-loaded fiscal support in several economies
• Financial conditions that are easing or no longer restrictive
• Continued investment in technology and infrastructure
• Lower energy prices supporting real incomes and margins

Growth remains uneven across regions and increasingly dependent on investment rather than consumption.

The US enters 2026 facing a more complex and fragile growth mix than headline numbers alone suggest. Trade policy and migration measures introduce a stagflationary impulse: labour market momentum weakens while inflation remains above target for longer due to delayed tariff pass-through.

At the same time, the technology investment cycle—particularly in advanced computing, infrastructure, and automation—continues to provide a countervailing demand and productivity impulse, limiting downside risk to growth. Inflation is expected to drift lower only gradually, with more meaningful progress in the second half of 2026.

Monetary easing continues at a measured pace, but long-term yields remain elevated due to fiscal concerns, institutional credibility risks, and higher term premia.

Real GDP growth contributions

China enters 2026 with significant strategic leverage, but also with deep structural constraints. Growth remains shaped by export strength, industrial policy, and weak domestic demand. The continued prioritisation of production over consumption results in persistent overcapacity and structural trade surpluses.

Policy support is expected to stabilise activity, but stimulus is unlikely to resolve underlying imbalances. China therefore remains both a source of global disinflationary pressure and a key geopolitical risk, particularly through supply-chain concentration and critical raw materials.

Emerging markets enter 2026 with a supportive but conditional backdrop. Growth remains close to trend, supported by easing inflation, scope for further (but slower) rate cuts, and export strength.

However, performance is highly sensitive to global financial conditions. Persistent inflation or delayed easing in the US, or a sharp global equity correction, would likely trigger EM underperformance. Selectivity remains essential.

The euro area enters 2026 with better-than-expected resilience, but momentum is likely to soften early in the year as labour markets cool. A recovery later in 2026 is expected, driven by defence and infrastructure investment, improved credit conditions, and lower energy prices.

Structural constraints—including weak productivity growth, demographic headwinds, and limited fiscal space—continue to cap medium-term potential.

Across regions, the defining macro vulnerability is the disconnect between GDP growth and job creation. Productivity gains raise the level of growth required to sustain hiring, making economies more sensitive to confidence shocks tied to labour-market outcomes.

Inflation is expected to be lower than in recent years, helped by easing energy prices and improved supply conditions. However, sticky inflation in the high-2s to ~3% range persists in some economies due to delayed tariff pass-through and wage-sensitive services inflation.

Policy rates are expected to converge toward neutral levels, with many central banks on hold or nearing the end of easing cycles. Where cuts continue, they are likely to be incremental.

Long-term yields are likely to remain elevated relative to pre-pandemic norms, reflecting higher fiscal deficits, increased issuance linked to investment agendas, balance-sheet normalisation, and geopolitical risk premia.

• Equities: Constructive base case, but highly polarised returns and elevated volatility risk.
• Credit: More vulnerable than equities due to tight spreads, rising issuance, and leverage.
• FX: Modest USD weakness with selective strength elsewhere; volatility remains elevated.

Commodity markets in 2026 are shaped by geopolitical fragmentation, uneven demand, and structural supply constraints, rather than a broad cyclical upswing. The environment favours selectivity, with precious and strategic commodities outperforming cyclical ones.

Gold: strategic hedge and structural support

Gold remains a key beneficiary of elevated geopolitical risk, fiscal uncertainty, and currency diversification. Sticky inflation, high term premia, and periodic equity-market volatility reinforce its role as a portfolio stabiliser. Even in a moderate-growth environment, gold retains upside asymmetry during episodes of financial or political stress.

Coal: structurally declining, cyclically resilient

Despite long-term decarbonisation pressures, coal retains near-term relevance due to energy security concerns, underinvestment in supply, and growing electricity demand in parts of the developing world. Prices are likely to remain range-bound but volatile, with downside limited by supply constraints and upside driven by weather or geopolitical shocks.

Platinum group metals (PGMs): cyclical pressure, selective opportunity

PGMs face mixed fundamentals. Autocatalyst demand remains under pressure from electrification trends, while hydrogen-related applications offer longer-term optionality. Structurally constrained supply—particularly in South Africa—limits downside risk. Performance is likely to be selective, with platinum better positioned than palladium, and rhodium remaining highly volatile.

Bottom line: commodities in 2026 play a diversifying and defensive role, led by gold, with coal and PGMs offering tactical rather than broad-based opportunity.

South Africa’s economy is expected to expand gradually, with real GDP growth around 1.8% in 2026, rising further in 2027 depending on fixed investment and the external environment. While modest, this represents a clear improvement on the prolonged stagnation of the past decade.

Growth and demand

Economic activity is supported by easing monetary policy and incremental progress in structural reforms, particularly in electricity supply and logistics. However, domestic demand remains subdued, weighed down by weak confidence and fiscal consolidation. Export growth is expected to be modest, constrained by higher tariffs on imports into the United States, though overall GDP impact is limited.

Inflation and monetary policy

Inflation is expected to rise modestly in 2026, driven mainly by higher food prices, before easing in 2027. The adoption of a lower inflation target of 3%, with a narrow tolerance band, provides a stronger nominal anchor. Moderate inflationary pressures should allow continued easing toward neutral rates, provided expectations remain well anchored.

Fiscal position and confidence

Fiscal consolidation over 2026–2027 is expected to help stabilise the public debt ratio, supported by improved primary balances, the conclusion of exceptional debt relief for the electricity utility, and reserve transfers. Financial conditions have improved, with narrower bond spreads and a firmer currency lowering borrowing costs.

Structural reform agenda

Further progress in:

• State-owned enterprise governance
• Electricity availability
• Logistics efficiency
• Regulatory simplification

would materially lift potential growth and job creation.

South Africa – Key Risks & Opportunities

Key risks

• Slower-than-expected reform execution in energy and logistics
• Persistently weak confidence and private investment
• Trade policy shocks and global risk-off episodes
• High structural unemployment limiting consumption growth
• Geopolitical volatility (SA diplomacy)

Key opportunities

• Sustained gains in electricity supply and logistics capacity
• Anchored inflation expectations under the lower target
• Scope for further monetary easing toward neutral
• Improved fiscal credibility and reduced risk premia
• Stronger response of private investment to improved certainty