President Cyril Ramaphosa has cautioned that rising international oil prices, fuelled by the ongoing US–Israel conflict with Iran, are expected to place continued pressure on South Africa’s economy.
Delivering the Presidency’s budget vote for the 2026/27 financial year in the National Assembly on Tuesday, Ramaphosa said inflation and the rising cost of living remain the most pressing challenges affecting citizens’ livelihoods.
He warned that higher oil prices, along with increases in the cost of key inputs such as fertiliser, could reverse progress made in reducing inflation and easing living costs.
“The effects of the surge in oil prices and other critical supplies like fertiliser are likely to undermine much of the progress that we have made in bringing down inflation and the cost of living. Together with disruption to the global economy, these developments are likely in the medium term to slow down our economic growth and to hamper our efforts to create jobs. We should anticipate that conditions will be difficult for the next while,” Ramaphosa said.
Despite these challenges, the President said South Africa’s economic outlook has improved in recent years. He noted progress in macroeconomic stability, stronger tax revenues, improved public finances, and stabilised national debt levels.
“Following years of challenges, our economy is on the mend. The macroeconomic environment has improved, tax collection revenues remain strong, public finances are in better shape and national debt has stabilised,” he told Parliament.
Ramaphosa also highlighted recent credit rating improvements, including Moody’s upgrade of South Africa’s outlook from stable to positive, and S&P’s decision to lift the country’s credit rating for the first time in two decades.
He further pointed to investment momentum generated at the sixth South Africa Investment Conference in March, where commitments exceeding R890 billion were secured across multiple sectors, with a significant portion coming from domestic investors.
“When local investors show confidence in the prospects of the economy, international investors follow suit,” he said.
The President also announced that government has launched what he described as the largest infrastructure development programme in South Africa’s history. The initiative will see around R1 trillion invested over the next three years in roads, dams, schools, hospitals, clinics, as well as energy and transport infrastructure.