{"id":852835,"date":"2026-03-04T12:52:24","date_gmt":"2026-03-04T10:52:24","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=852835"},"modified":"2026-03-04T12:52:28","modified_gmt":"2026-03-04T10:52:28","slug":"the-shock-south-africa-really-didnt-need","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/852835\/the-shock-south-africa-really-didnt-need\/","title":{"rendered":"The shock South Africa really didn’t need"},"content":{"rendered":"\n

The latest RMB\/BER Business Confidence Index for the first quarter of 2026 shows that businesses in South Africa were finally crawling out of the 2020\/21 COVID-19 slump\u2014but the US’s war in Iran now risks upending that.<\/p>\n\n\n\n

The index rose by a further three points to 47 in the first quarter of 2026, building on the improvement in the fourth quarter of 2025. <\/p>\n\n\n\n

The BCI now stands six points above its long-term average and a solid 20 points above the post-COVID low reached in 2023Q2.<\/p>\n\n\n\n

Barring the post-COVID recovery, this is the highest level of confidence since 2015.<\/p>\n\n\n\n

According to the Bureau for Economic Research, the survey was conducted at a prime time, from 12 to 23 February 2026. <\/p>\n\n\n\n

This means that business sentiment was supported by a generally well-received State of the Nation Address (SONA) from President Cyril Rampahosa, and riding on the wave of positivity in the economy.<\/p>\n\n\n\n

This included the continued stability of the Government of National Unity (GNU) ahead of the 2026 Budget, a stronger rand, interest rates still in a cutting cycle, and macroeconomic indicators pointing to growth.<\/p>\n\n\n\n

The BER noted that the backdrop wasn’t without challenges. Locally, the country is facing a nationwide water crisis and the outbreak of foot-and-mouth disease (FMD).<\/p>\n\n\n\n

“In addition, available high-frequency official data points to a loss of momentum in the production side of the economy during 2025Q4,” the BER noted.<\/p>\n\n\n\n

“This is somewhat unexpected given the more positive underlying activity data from survey results during this period.”<\/p>\n\n\n\n

However, the real kicker currently working against the upward swing in sentiment comes from international events.<\/p>\n\n\n\n

During the survey, businesses flagged concerns about geopolitical tensions between the United States, Israel and Iran. <\/p>\n\n\n\n

“Geopolitical developments, largely beyond South Africa’s control \u2026 remain top of mind for many businesses,” said Isaah Mhlanga, chief economist at RMB.<\/p>\n\n\n\n

After the survey, however, many worst fears were realised as the US launched ‘Operation Epic Fury’ on 28 February, bombing Iran, and killing its Supreme Leader, sending markets into chaos.<\/p>\n\n\n\n

Black swan or momentary shock<\/h2>\n\n\n\n
\"\"<\/a>
Investec Chief Economist, Annabel Bishop<\/figcaption><\/figure>\n\n\n\n

Many of the positives flagged by businesses in the survey have been shaken by the United States’ war.<\/p>\n\n\n\n

The rand, which had been trading below R16 to the dollar, has tumbled to R16.30\/$ as investors moved into safe-haven assets.<\/p>\n\n\n\n

While the gold price has risen as a result\u2014moving back over $5,100 an ounce\u2014oil prices have skyrocketed to around $83 a barrel.<\/p>\n\n\n\n

Data from the Central Energy Fund (CEF) shows that the impact of the war has been immediate, with local pricing showing an under-recovery building for April of almost R2 a litre for petrol, rising to over R3 a litre for diesel.<\/p>\n\n\n\n

This risks delivering an inflation shock after the country had been stabilising toward the South African Reserve Bank’s new 3% target.<\/p>\n\n\n\n

If sustained for a long period, this could upend the country’s interest rate-cutting cycle, with forecasters already pricing in the risk of interest rate hikes.<\/p>\n\n\n\n

The key question that businesses, economists, and analysts will want answered is whether the war will be brief or drag on.<\/p>\n\n\n\n

According to Sebastian Mullins, Head of Multi-Asset and Fixed Income at Schroders, he does not believe that the US attacks are the black swan that the world has been worrying about for years.<\/p>\n\n\n\n

“The conflict appears to be very much dominated by the US, reducing the risk of this spiralling into something more dangerous,” he said.<\/p>\n\n\n\n

Investec Chief Economist Annabel Bishop also believes that, while volatile, markets will ride out the conflict.<\/p>\n\n\n\n

“Volatility is likely, and the US is reportedly warning of the war lasting for four to five weeks,” she said.<\/p>\n\n\n\n

“Our expected case does not see the tensions persist, and persistently spread, through the Middle East. The risk has risen slightly, but it still remains an extremely low probability.”<\/p>\n\n\n\n

Bishop said that oil price volatility is likely to continue, but there is only a low risk that the Brent crude oil price will exceed $100 a barrel for a sustained period.<\/p>\n\n\n\n

“A temporary breach remains possible and would be in a marked risk-off environment, with rand weakness and dollar strength,” she said.<\/p>\n\n\n\n

But a $100 mark “is not expected to be sustained, and instead has only a temporary price shock, which South Africa’s Monetary Policy Committee would be expected to look through and not react with higher interest rates,” she said.<\/p>\n","protected":false},"excerpt":{"rendered":"

Business Confidence in South Africa has hit some of its highest levels since 2015\u2014but the US-Iran war has rattled markets, and risks turning things sour.<\/p>\n","protected":false},"author":10,"featured_media":833716,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[19853,8333,1889],"class_list":["post-852835","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-annabel-bishop","tag-bci","tag-business-confidence"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852835","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=852835"}],"version-history":[{"count":1,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852835\/revisions"}],"predecessor-version":[{"id":852846,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/852835\/revisions\/852846"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/833716"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=852835"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=852835"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=852835"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}