It’s easy to fall into a trap of trying to predict the behaviour of the Trump administration. There are myriad experts, commentators, traders, journalists, analysts, (sofa) economists, influencers, TikTokkers and neighbours who are ready with an opinion on what the future will hold. In fact, if you’re lucky, they may have a second view, when the first one turns out not to materialise.

During volatile times, there are a few factors that South African investors should keep in mind. Surprisingly, none of these has to do with announcements from the Oval Office (or on Truth). It will be changes to the current trends of economic growth, inflation and interest rates that will influence the health of personal income statements and balance sheets.

Economic growth
The risk of a global recession has risen sharply on the back of sharply higher oil prices, which will have the most immediate economic impact affecting inflation and interest rates. Slower global growth increase risks to open economies (of which South Africa is one) where foreign trade represents about 60% of gross domestic product.

South Africa may be far from the fighting, but the impact will be felt through global energy markets. Oil and petroleum products account for nearly 18% of our imports, so shifts in international prices feed quickly into the domestic economy. When geopolitical tensions rise, markets build in a risk premium, pushing oil prices higher – especially when supply routes like the Strait of Hormuz are threatened.

For households and businesses, higher oil prices translate directly into higher fuel costs. Current conflict levels led to a significant petrol and diesel price increase in April alone (despite being subsidised by R3 a litre by the South African government). A prolonged or expanding war would mean even greater pain. Fuel costs act like a tax: consumers spend more on transport, while businesses face rising logistics and production expenses.

The result is slower growth and broader inflationary pressure. What begins as a spike in petrol and diesel prices eventually filters through the economy, raising costs across the board. In this war, South Africa would do well to import only the pain, and not the politics.

Inflation
One of the clearest knock‑on effects of higher oil prices is inflation. Before the Middle East conflict escalated, South Africa’s 2026 outlook looked manageable. But a sharp jump in petrol costs could push consumer inflation above 4% in April, compared with January’s forecast of 3.4%. On an annual basis, inflation may average closer to 4.2% versus earlier estimates of 3.3%. This doesn’t signal a long‑term problem, but it complicates the short‑term picture for monetary policy.

Interest rates
Earlier in the year, the expectation was that the South African Reserve Bank (SARB) would cut rates by about 75 basis points in 2026, starting in March and continuing at alternate Monetary Policy Committee (MPC) meetings. As it turns out, they kept rates unchanged at their last meeting. If oil prices remain high and inflation spikes, the
risk‑averse MPC will, however, likely delay cuts until the outlook is clearer. A quick easing of tensions could still open the door to rate reductions later in the year, while a prolonged conflict might even force hikes—though that risk remains low. Petrol shocks often prove deflationary over time, as households cut other spending and weaker
demand helps contain broader inflation. In the end, human grit and endeavour will find a way. Markets reach all-time highs because that is what they do – over the long term, they go up. There will be bumps along the way, as the graph below of the US equity market shows.