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Frederick Mitchell, Chief Economist | Aluma Capital (Pty) Ltd
Frederick Mitchell
August 31, 2026

Private Sector Credit Extension (PSCE): July 2026

Private sector credit growth remained resilient in July 2026, reflecting continued demand for financing despite elevated living costs and renewed interest rate uncertainty. While overall credit extension continues to benefit from the rate-cutting cycle that began in late 2024, subdued property activity and rising household reliance on short-term credit highlight ongoing pressure on consumers and businesses.

In July 2026, credit demand grew by 7.4%, in line with market expectations. Since interest rate cuts began in September 2024, overall credit growth has accelerated, with most subcategories experiencing increases, especially following the South African Reserve Bank’s decision to lower interest rates before the start of the conflict in the Middle East and subsequent increase in global energy costs and higher fuel prices.

Mortgage advances and credit for acquiring fixed assets increased slightly, to 5.2% in July, following a 4.7% increase in June. Growth in the South African property market remains slow, reflecting low capital expenditure from both households and businesses. This sector’s recovery remains slow due to high consumer debt levels, slow wage growth, and high living costs, especially household fuel expenditure due to high international oil prices, as well as high administered prices such as water, electricity, and municipal rates & taxes.

In July, instalment credit sales increased by only 0.6%, following a 0.6% increase the previous month, marking annual growth of 9.0%. Over the past two years, consumers have remained increasingly dependent on short-term credit to manage rising living costs, as shown by an 8.8% increase in other loans and advances, notably down from 11.5% in the May 2026 figures due to the higher interest these loans carry after the interest rate increase the previous month.

With inflation still above the target range and fuel prices remaining elevated despite a recent slight dip, energy costs continue to put upward pressure. As a result, the SARB may hike interest rates again in September 2026 if inflation expectations remain above the upper threshold of the new target range of 4.0% in the short- to medium term.

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Consumer Inflation – August 2026

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Gross Operating Surplus: A View on Company Profits 2026Q2

South Africa’s business profitability showed surprising resilience in the second quarter of 2026, outpacing inflation despite a 0.2% contraction in economic activity, higher oil and import prices, trade tariffs, and ongoing diplomatic tensions. While overall profit growth slowed from the first quarter, several sectors, including transport and logistics, mining, electricity and utilities, personal services, and trade, recorded substantial gains, offering important clues about where the economy’s strongest opportunities may lie. This report examines the forces shaping Gross Operating Surplus across key industries, explains the mounting pressures on company performance, and considers whether easing geopolitical tensions, lower oil prices, and greater policy certainty could unlock stronger economic activity, employment, and investment in the months and years ahead.

South African Gold and Foreign Exchange Reserves for August 2026

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