Old Mutual Investment Group says South Africa\u2019s (SA) structural reform and growth path could be delayed by 12 to 18 months due to geopolitical shocks.<\/p>\n
This comes as tensions in the Middle East continue to drive oil price increases.<\/p>\n
Investment Analyst Sisa Kobus expects inflation to average closer to 4% from April, up from the current 3.1%, and anticipates that the central bank could implement a 50 basis point interest rate hike.<\/p>\n
Kobus says the country\u2019s growth path faces a delay rather than a derailment, with oil shocks expected to place pressure on inflation and consumers.<\/p>\n
According to Statistics SA, March 2026 inflation rose to 3.1%, up from 3% in February.<\/p>\n
Kobus believes this will be the last data point before the full impact of geopolitical tensions is reflected.<\/p>\n
\u201cFrom April onwards, we\u2019ll start seeing the impact of the increase in oil on inflation, so our sort of profile went from averaging around 3% to averaging closer to to 4%. And there we have pencilled in oil obviously spiking to closer to $120 in April, and that kind of moderating to around $90. So still quite elevated and in that scenario, we think inflation is significantly above target, such that to avoid being entrenched and going into second round effects, the central bank is going to have to increase the policy rate. And that\u2019s why our base case is that they\u2019ll increase rates by 50 basis points. So two sorts of increases of 25 and not a once-off,\u201d says Kobus.<\/p>\n
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