<\/p>\n
South African business sentiment weakened in the second quarter as consumers faced fresh pressures from the Iran war that\u2019s clouded the outlook for inflation and interest rates.<\/p>\n
The quarterly business confidence index compiled by FirstRand\u2019s Rand Merchant Bank and Stellenbosch University\u2019s Bureau for Economic Research dropped eight points to 39 in the three months through June, according to a report published Tuesday. That\u2019s the weakest level since the third quarter of 2025, the data shows.<\/p>\n
While the decline in the reading was broad-based, it was largely dragged down by consumer-facing industries, the lender said.<\/p>\n
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\u201cThe moderation comes against a shift in the global backdrop, as escalating Middle East tensions have driven higher oil prices and reshaped interest-rate expectations, prompting businesses to reassess the outlook,\u201d the lender said.<\/p>\n
South Africa\u2019s Reserve Bank last week raised borrowing costs by 25 basis points to 7% \u2014 the first hike in three years \u2014 as it flagged intensifying inflationary pressures. Policymakers also signaled that further monetary-policy tightening will be warranted if the war drags on, while assuming that in the worst-case scenario, the policy rate would increase by at least a further 75 basis points by the third quarter of this year.<\/p>\n
Since the US and Israel attacked Iran on Feb. 28, oil prices have surged by a third, pushing domestic gasoline prices to a record high.<\/p>\n
\u201cBusinesses have had to adjust quickly to a less-supportive outlook, which weighed on sentiment across most sectors,\u201d said Isaah Mhlanga, chief economist at RMB. \u201cMany respondents indicated that uncertainty had increased and that clients had become more cautious about spending and investment decisions.\u201d<\/p>\n
Any improvement in sentiment will depend on geopolitical tensions easing, oil prices stabilising and more certainty about the outlook for interest rates, he said.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#South #Africa #business #mood #slips #Iran #war #upends #rate #outlook<\/p>\n","protected":false},"excerpt":{"rendered":"
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