‘Slightly more optimistic outlook for SA’ – Economist of the Year survey

Brent crude has not reacted to the renewed conflict in the Middle East in the same way it did when war first broke out in February. Instead, it remained below $80 a barrel on Monday, offering some relief for fuel prices.

Professor Carel van Aardt, chief operating officer of the Bureau of Market Research (BMR), tells Moneyweb he believes several factors have prevented a larger spike.

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Even though around 20% of global oil supplies still move through the Strait of Hormuz, exporters such as Saudi Arabia have increasingly used its west coast for exports.

“And some pipeline routes transport oil via Pakistan to China, which allow exports to continue despite the conflict,” he says.

In addition, there is the growing perception that the Organisation of Petroleum Exporting Countries (Opec) is no longer operating in the interests of all its members.

If the mechanism used to restrict production comes under pressure, supply is likely to increase as well, which would help keep oil prices lower, Van Aardt adds.

“But I think oil prices will remain volatile, fluctuating as the global mood swings between hope and despair.”

Revised forecast

That thinking is reflected in the latest BMR/Unisa Economist of the Year Competition – economists have become slightly more optimistic about South Africa’s external outlook even though the broader economy remains stuck in low gear.

The June survey left the consensus forecasts for GDP growth, inflation and interest rates unchanged from May.

Real GDP growth is still expected to reach only 1.2% this year, while inflation is forecast to average 4.1%.

Economists also continue to expect the prime lending rate to end the year at 10.5%, with the rand trading at around R16.50 to the dollar.

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The biggest changes came elsewhere.

Economists have lowered their forecast for Brent crude to $77.50 a barrel in the fourth quarter from $80 previously.

Listen: Economist of Year forecast revises global economic outlook [June 2026]

They also expect slightly lower long-term government bond yields and a narrower current account deficit, reflecting a modest improvement in South Africa’s external position.

The monthly Economist of the Year competition brings together forecasts from leading economists across the public and private sectors.

The competition has become one of SA’s longest-running independent measures of consensus economic expectations.

Participants submit monthly forecasts between February and December, with greater weighting given to forecasts made earlier in the year when uncertainty is highest.

Stuck on a low-growth trajectory

While the June survey suggests the pace of deterioration has slowed, Van Aardt doesn’t believe the country is on the verge of a meaningful recovery.

He describes the 1.2% growth forecast as realistic.

Another trend Van Aardt has observed after years of running the competition is that economists tend to start each year on an optimistic note with growth forecasts before global events force them to tone them down.

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“Every year they begin thinking this will be the year things improve, and then life happens.”

This year, it was the conflict in Iran that derailed expectations. Last year, it was US President Donald Trump’s tariff announcements.

The result is that early optimism almost always fades as the year progresses.

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Van Aardt says although first-quarter GDP growth surprised to the upside and the balance of payments has improved, employment growth remains significantly weaker than expected.

That, in turn, is weighing on wage growth and household spending.

Consumer spending was one of the key drivers of growth last year, but expectations for this year are considerably weaker.

Read: Real take-home pay at a two-year low

“We remain on a low-growth trajectory and I doubt that we will move out of it quickly,” he says.

Indicators to watch

For Van Aardt, there are four indicators worth watching over the coming months:

Brent crude oil prices – these will continue to be one of the best measurements of geopolitical tensions and will largely determine whether inflation risks continue to ease.
South African and international bond markets – these will give an indication of longer-term investor confidence.
Inflation – not only headline CPI, but also categories that have the biggest impact on household budgets, such as food, electricity and clothing.
Business and consumer confidence indices – these will provide the clearest indication of whether conditions on the ground are beginning to improve.

Moneyweb is the media partner of the 2026 BMR/Unisa Economist of the Year Competition.

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