Petrol and diesel prices are expected to increase by R6.67 a litre and R11.22 a litre, respectively, pushing headline consumer inflation to 4.5% in April from 3.1% in March.
Image: ChatGPT
Not only is it unlikely that there will be a rate cut tomorrow afternoon, but South Africans are set to see their net income eroded by increased inflation at a time when they are already worried about money.
Several economists have now pointed to the South African Reserve Bank taking a more hawkish stance and keeping rates on hold tomorrow, with some cautioning that there may even be hikes should the war continue for much longer.
This perfect storm is the result of the ongoing war in the Middle East, which has pushed oil to past $100 a barrel with extreme implications for fuel prices at the pumps on April Fool’s Day.
Petrol and diesel prices are expected to increase by R6.67 a litre and R11.22 a litre, respectively, pushing headline consumer inflation to 4.5% in April from 3.1% in March.
“The expected spike in fuel prices in early April will likely derail the moderate inflation outcome previously envisaged,” said independent economist Elize Kruger.
For context, inflation is currently spot on with the South African Reserve Bank’s 3% target although there are predictions that it will again hit 4% next month. Inflation is now expected to average around 4.4% in 2026, compared with a pre-conflict forecast of about 3.4%.
Kruger added, “given the extent of these increases, the probability that these could trigger a widespread upward adjustment in prices across the economy is very high – but this is also dependent on how long fuel prices remain at elevated levels”.
As a result, inflation is set to rise amid depressed economic growth, with PayInc saying that this will put a strain on real income – the amount actually available in people’s wallets.
The PayInc Net Salary Index, which tracks the nominal net salaries of about 2.1 million salary earners, showed only a marginal 0.1% increase in February month-on-month, while it was 2.2% higher than a year earlier.
But that stability is already being eroded by inflation. Adjusted for inflation, the index declined by 1.2% in the first two months of the year, pointing to a steady loss of purchasing power.
The PayInc nominal net salary index.
Image: PayInc
This comes as most working people already worry about money. According to fintech company Wealthbit’s 2026 Employee Benefits Report, 80% of employees in South Africa worry about money most of the time.
Some 56% of financially distressed employees spend more than three hours a week dealing with personal finances during work hours.
This equates to roughly 19.5 working days a year, affecting productivity and performance.
“While the full impact of the war is unclear, it is expected to have ripple effects on both global and local economies,” said Kruger.“Even if the conflict is short-lived, it is likely to place pressure on economic growth.”
Carpe Diem Research has revised its economic growth forecast for 2026 to 1.1%, down from 1.6%, reflecting the deteriorating outlook.
Wealthbit chief executive officer Alex Cook added that those who are employed will not be able to fully concentrate when they are worried about money.
“The maths is simple: People who are worrying about money are not fully present. Not because they lack commitment, but because the brain doesn’t compartmentalise well under financial threat. It shows up as presenteeism, distraction, motivation loss, and earlier job seeking,” Cook said.
This is already translating into higher turnover risk, with Wealthbit data showing financially stressed employees are twice as likely to look for a new job, while 70% are considering job changes due to financial pressure.
“This economic outlook is not conducive to comfortable employment conditions,” noted Kruger. “This could have a negative impact on employment prospects and earnings expectations in the remainder of 2026,” said Kruger.
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