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The conflict in the Middle East could derail South Africa\u2019s best economic start in a decade, as higher food and fuel prices rein in the fledgling recovery in the continent\u2019s biggest economy, the head of one of the nation\u2019s top retail lenders said.<\/p>\n
\u201cThe war does actually put a damper back on growth,\u201d said Harry Kellan, chief executive officer of First National Bank, a unit of South Africa\u2019s second biggest bank by market value FirstRand Ltd.<\/p>\n
South Africa\u2019s economy climbed 1.1% in 2025 \u2013 the fastest pace in three years \u2013 but lagged the International Monetary Fund\u2019s estimate for 4.4% in the sub-Saharan region for last year.<\/p>\n
Read:<\/p>\n
SA\u2019s economy in best shape in decade \u2013 Standard Bank
\nSeven charts that show how SA may finally be turning the corner<\/p>\n
The nation\u2019s expansion has averaged less than 1% annually for more than a decade.<\/p>\n
A credit upgrade by S&P Global Ratings, South Africa\u2019s removal from the Financial Action Task Force\u2019s dirty-money list and slower inflation were signs of a better trajectory.<\/p>\n
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Momentum was expected to pick up as the government and private sector work to revive dilapidated water infrastructure, and the state tries to intervene to help deeply dysfunctional municipalities that are unable to provide basic services.<\/p>\n
But the conflict that started on 28 February has sent oil prices soaring and roiled equity and bond markets across the globe.<\/p>\n
The rand has lost 6.7% to the dollar since then, making it the worst-performing major and emerging-market currency in the period. The country\u2019s benchmark stocks gauge is the worst globally in dollar terms, having declined 20%.<\/p>\n
\u201cThis year we were going from 1.3% GDP growth to further north of 1.5% and significantly toward 2%, and it would have continued going that way,\u201d Kellan said.<\/p>\n
South African Central Energy Fund data indicates the possibility of the largest monthly\u00a0fuel-price increase\u00a0on record set for April, which will stoke inflation concerns and knock consumer demand.<\/p>\n
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Can SA fix its \u2018Code 3\u2019 economy?<\/p>\n
Avior Capital Markets cut its forecast for growth in South African gross domestic product this year to 0.2% from a prior estimate of 1.7%, citing the probability of a prolonged conflict in the Middle East, which will consequently see Gulf oil \u201cheld hostage\u201d.<\/p>\n
\u201cI don\u2019t think our house view for this calendar year goes below 1% growth, but it\u2019s a pity, because it comes off from where it was growing,\u201d Kellan said.<\/p>\n
\u201cIt will be painful for a period, and then we become resilient and the economy hustles its way out of it.\u201d<\/p>\n
\u00a9\u00a02026\u00a0Bloomberg<\/p>\n
#SAs #economic #start #decade #threat #FNB<\/p>\n","protected":false},"excerpt":{"rendered":"
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