Link to article: https://www.reuters.com/world/africa/south-africa-private-sector-returns-growth-iran-war-clouds-outlook-pmi-shows-2026-04-07/
For the first time in some years, South Africa’s economy and, more specifically, their private sector, is showing significant improvement and signs of upward trends, but there is a massive threat that could potentially throw all of it out the window. The conflict in the Middle East has the potential to tank South Africa’s market, dragging the private sector and economy as a whole, down with it.
According to the S&P SA PMI, the private sector returned to its trend of growth in March, going up to 50.8 from 50.0 in February. In the world PMI, anything over 50 is positive and provides a hopeful outlook. There are many factors which have contributed to this – local businesses are working and turning strong profit margins, and the country has seen its quickest employment rate since mid-2024. South African companies aren’t just keeping their heads above the water, they are operating swimmingly.
As positive as these signs are for the South African economy, the war in Iran threatens to derail all of it. South African exports have plummeted, facing the sharpest dive in over two years. Additionally, internal confidence in local and small businesses has begun to drop, which indicates a potential future drop in confidence on the national scale, which will have long-lasting negative effects that pose significant threats to the newly-fluorishing economy.
David Owen, an economist at S&P Global, pointed out that the trend “bifurcated” which essentially means that it is split. The growth that is being shown right now is entirely dependent on how long the geopolitical tensions last and remain the same. Should they worsen, it is likely we could see an absolute trend reversal.
The Iran War is a threat to South Africa’s regional power and internal legitimacy as it provides the base for a potentially unstable future situation.