{"id":55071,"date":"2023-10-16T16:49:10","date_gmt":"2023-10-16T16:49:10","guid":{"rendered":"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa"},"modified":"2023-10-16T16:57:43","modified_gmt":"2023-10-16T16:57:43","slug":"warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa","title":{"rendered":"Warning over petrol prices, inflation and interest rates in South Africa"},"content":{"rendered":"

Africa-Press – South-Africa. <\/strong><\/span>South Africans may feel far removed from the conflicts in the Middle East, but economists warn that the country can\u2019t escape the ripple effects and consequences of war.<\/p>\n

The eruption of what economists call the \u201cIsrael-Hamas war\u201d in the Middle East last week added layers of complexities to markets that threaten to drive energy prices higher while heightening the risk of further interest rate hikes and higher inflation here at home.<\/p>\n

The main area of contention in this particular analysis is oil.<\/p>\n

Oil prices hit around $95 a barrel in September due to tightening supplies, but eased to under $85 a barrel in early October as market tensions eased.<\/p>\n

This easing of prices has put petrol and diesel prices on track for a cut in November. However, this does not factor in the risk profile for the weeks and possibly months ahead.<\/p>\n

Economists have warned that with the Israel-Hamas conflict dominating headlines over the past week, markets have again moved into high risk and uncertainty, pushing oil prices higher.<\/p>\n

At the start of the new week (Monday, 16 October), oil prices are once again above $90 a barrel, driven by tensions around the war.<\/p>\n

According to economists at the Bureau for Economic Research, this is because Iran now risks being pulled into the conflict, with the United States alleging that the major oil producer had a hand in setting up the war.<\/p>\n

This brings the risk of retaliation into the picture, the BER said.<\/p>\n

\u201cOil output in Iran would not only be impacted in the event of Israeli strikes on the country but also due to the possible reimposition and\/or tightening of Western sanctions against Iran.<\/p>\n

\u201cThe Iranian regime has not only financed Hamas for many years, but the suspicion is also that the county may have helped with the planning of the Hamas attack on Israel that sparked the outbreak of war,\u201d it said.<\/p>\n

RMB chief economist Isaah Mhlanga said that the war not only holds significant risks for oil but also for the local and global economy.<\/p>\n

\u201cIran is a major oil-producing country and one of the new members of the BRICS+ countries. The US has alleged that Iran was involved in the attack on Israel by Hamas. That allegation puts Iran on the firing line for more US sanctions that could be extended to any country that trades with it,\u201d he said.<\/p>\n

\u201cThis increases the risks to the global and South African economy from a geoeconomic, geostrategic and geopolitical perspective, with negative implications for the outlook for inflation, monetary policy and economic growth.\u201d<\/p>\n

Mhlanga said that the longer the war goes on, the greater the risk that it expands to other nations \u2013 either directly or indirectly \u2013 particularly in the Middle East.<\/p>\n

\u201cA possible expansion of the war to the broader Middle East will drive energy prices higher, particularly oil prices. As an oil importer, the immediate impact on the South African economy will come through higher fuel prices and overall inflation,\u201d he said.<\/p>\n

While inflation and interest rate projections are, for now at least, are broadly unchanged, Mhlanga said the risk profiles have shifted.<\/p>\n

\u201cThe risk of a rate hike in November is higher now relative to last month,\u201d he said.<\/p>\n

The last hold on interest rates in September was a close call, the economist noted, with the Reserve Bank\u2019s Monetary Policy Committee voting to hold 3-to-2. The tone from the central bank has also been hawkish.<\/p>\n

\u201cA sustained rise in oil prices will drive fuel prices and inflation higher than our current forecast, which will also imply a higher risk that the SARB will hike policy rates,\u201d he said.<\/p>\n

\u201cOil futures markets are not pricing in the possibility of a major shock in energy prices, which means they don\u2019t see the war extending beyond Hamas and Israel. That is precisely where the risks lie, in that if a major oil-producing country is drawn into the war, oil markets will respond negatively,\u201d he said.<\/p>\n

For More News And Analysis About South-Africa<\/a> Follow Africa-Press<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Africa-Press – South-Africa. South Africans may feel far removed from the conflicts in the Middle East, but economists warn that the country can\u2019t escape the ripple effects and consequences of war. The eruption of what economists call the \u201cIsrael-Hamas war\u201d in the Middle East last week added layers of complexities to markets that threaten to […]<\/p>\n","protected":false},"author":84,"featured_media":55069,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[274,315,275],"class_list":["post-55071","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press","tag-africa-press-south-africa","tag-south-africa-2"],"yoast_head":"\nWarning over petrol prices, inflation and interest rates in South Africa - South Africa<\/title>\n<meta name=\"description\" content=\"South Africans may feel far removed from the conflicts in the Middle East, but economists warn that the country can\u2019t es ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Warning over petrol prices, inflation and interest rates in South Africa\" \/>\n<meta property=\"og:description\" content=\"South Africans may feel far removed from the conflicts in the Middle East, but economists warn that the country can\u2019t es ...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa\" \/>\n<meta property=\"og:site_name\" content=\"South Africa\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2023-10-16T16:49:10+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-10-16T16:57:43+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/10\/sm_1697462813.723633.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"Warning over petrol prices, inflation and interest rates in South Africa\",\"datePublished\":\"2023-10-16T16:49:10+00:00\",\"dateModified\":\"2023-10-16T16:57:43+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa\"},\"wordCount\":680,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/south-africa\/sites\/31\/2023\/10\/sm_1697462813.723633.jpg\",\"keywords\":[\"Africa Press\",\"Africa Press-South-Africa\",\"South-Africa\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa\",\"url\":\"https:\/\/www.africa-press.net\/south-africa\/all-news\/warning-over-petrol-prices-inflation-and-interest-rates-in-south-africa\",\"name\":\"Warning over petrol prices, inflation and interest rates in South Africa - 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