Discover how the ongoing conflict in the Middle East could lead to rising costs for South African consumers, from petrol prices to grocery bills, and learn how to navigate these financial challenges.
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When conflict happens in regions linked to global energy supply, oil prices often rise because of uncertainty around supply, according to Zandile Makhoba, economist and lead research and insights at Liberty.
She says the most immediate impact of the conflict for South Africa is likely to be through the price of oil.
“South Africa imports most of its fuel, which means higher global oil prices can eventually translate into higher petrol prices locally," says Makhoba.
According to Makhoba, the war in the Middle East may feel far away, but its economic ripple effects could eventually be felt much closer to home, from the petrol pump to grocery bills.
While the conflict is unfolding thousands of kilometres away, economists say global events like these can still affect South African consumers, particularly through fuel prices, inflation, and the value of the rand, she says.
In practical terms, when oil prices rise internationally, it increases the cost of petrol and transport. This can push up the price of everyday goods as businesses face higher costs to move products across the country, with food prices often following soon after, says Makhoba.
She says higher fuel costs do not only affect motorists. They also influence the cost of transporting goods across the country, which can filter through to everyday expenses such as groceries and household items.
This dynamic can also place pressure on South Africa’s terms of trade, which refers to the relationship between export prices and the cost of imports like oil.
“When the cost of imports rises faster than the value of exports, it can weaken the rand,” says Makhoba.
A weaker rand can make imported goods more expensive and may push inflation higher. She adds that the South African Reserve Bank may delay expected interest rate cuts while it assesses the inflation impact of the conflict.
“Interest rate cuts may be postponed while policymakers assess the inflationary impact of the conflict, but the threshold for interest rate hikes remains very high,” she says.
For consumers already dealing with high living costs, global uncertainty makes careful financial planning even more important, she says.
Carlo Gil, wealth adviser at Liberty, says households can take practical steps to stay financially stable if the cost-of-living rises.
“Periods of global uncertainty can place pressure on household budgets, especially if fuel and food prices rise. Consumers should focus on staying financially organised and disciplined," says Gil.
He suggests the following steps:
Review your monthly budget
Look closely at where your money is going and identify areas where you can reduce or reprioritise spending. Understanding your cash flow can help you make more intentional choices about what matters most to your lifestyle.
Cut back on non-essential spending
Small lifestyle adjustments can help free up money for essentials like fuel and groceries.
Build or maintain an emergency fund
Having savings set aside can help cushion unexpected financial shocks. A solid cash reserve provides stability and can prevent the need to access long-term investments prematurely.
Avoid taking on unnecessary debt
Higher inflation can make borrowing more expensive, so it is wise to be cautious about new credit.
Stay invested and avoid knee-jerk decisions
Market volatility can create opportunities, and exiting investments at the wrong time can lock in losses.
Review your investment strategy
Ensure your portfolio remains aligned with your risk profile, time horizon, and evolving market conditions.
Speak to a Financial Adviser
Professional advice can help you adjust your financial plan and stay on track with long-term goals.“While global events are beyond our control, managing our finances wisely can help households remain resilient during uncertain times,” Gil says.
PERSONAL FINANCE