December is a perfect opportunity for businesses in retail to increase sales.
Small and medium enterprises (SMEs) are advised to take advantage of the festive season, especially those in retail.
Miguel da Silva, group executive of business banking at TymeBank, details certain developments that are set to affect small businesses in South Africa as the festive season approaches.
SA’s credit rating
The first event set to affect SMEs is Moody’s next review of the country’s credit rating scheduled for 5 December. The agency currently rates South Africa at Ba2 (just below investment grade), with a stable outlook.
“This comes after S&P Global Ratings upgraded both SA’s foreign currency long-term sovereign credit rating to ‘BB’ from ‘BB-‘ and local currency long-term sovereign credit rating to ‘BB+’ from ‘BB’ in November,” Da Silva said.
“The upgrade was the first for South Africa by any of the major credit rating agencies in over 16 years and SA was one of just three countries globally to secure an S&P upgrade in 2025.”
ALSO READ: Money Smart Week: Five tips for SMEs to prepare for setbacks
Festive season to offer retail cushion for SMEs
He says December 2025 arrives with consumer spending forecast to grow 7% year-on-year following a robust Black Friday performance.
“Black Friday spending has now increased consistently over the past three years and is anticipated to once again hit new highs this year, despite ongoing cost-of-living concerns.
“The combination of stable electricity, recovering consumer confidence and strong tourism (+26.9% YoY international visitor growth) has created favourable trading conditions for retail, hospitality and service SMEs.”
Historic investment framework
Da Silva adds that on 20 November 2025, SA and European Union signed a clean trade and investment [artnership in Johannesburg, the EU’s first such agreement globally.
“With bilateral trade valued at €45 billion (about R900 billion) in 2024 and the EU representing over 40% of foreign direct investment in the country, the partnership focuses on renewable energy, clean fuels, sustainable transport, raw-materials value chains and climate-mitigation technologies.”
He is of the view that the partnership opens new market opportunities for SMEs in green technology supply chains, renewable energy services and environmental goods, with potential access to EU investment and technical cooperation programmes.
ALSO READ: Warning to small businesses ahead of festive season and Black Friday
Key data releases round out the year
Statistics South Africa (Stats SA) released its third-quarter 2025 GDP figures, showing that the economy grew by 0.5% quarter-on-quarter, down from a revised 0.9% in the second quarter, a marked slowdown in momentum.
On a year-on-year basis, GDP rose by 2.1%, exceeding the 1.8% expected by economists.
“This data provides a picture of economic momentum heading into 2026, with full-year growth projected at approximately 1.2%. Subdued GDP figures signal constrained consumer demand and cautious business investment.”
Another set of data that the entrepreneurs can look out for is the November 2025 Consumer Price Index to be released around 17-18 December
‘October 2025 inflation stood at 3.6% year-on-year, comfortably within the South African Reserve Bank’s revised 3% target with a 1% tolerance band,” says Da Silva.
“With no monetary policy committee meeting scheduled for December, the November decision will carry through to January 2026. Continued low inflation supports consumer purchasing power during the festive season and keeps borrowing costs stable for SME working capital and asset financing needs.”
Optimistic note
He adds that December 2025 closes the year on a cautiously optimistic note for South African SMEs.
“The convergence of robust festive-season trading conditions, a historic credit-rating upgrade, and newly forged international partnerships offers both immediate revenue opportunities and longer-term strategic pathways.
“SMEs that leverage strong consumer demand through the peak retail period while monitoring key economic releases will be well-positioned to refine their operational and financing strategies heading into 2026.”
NOW READ: Black Friday: One person spent more than R1m for a holiday
