The renewed conflict between Israel and Iran has once again placed geopolitical risk firmly back on the global agenda, Business Leadership SA (BLSA) CEO Busi Mavuso said on Monday. “And through it all, the resilience shown by the South African economy has been impressive in relation to most economies, with the rand holding up far better than it has during past global shocks,” she said. Mavuso attributed the resilience to credible policymaking, a lower inflation target and broader reforms in the financial sector. “This resilience is a direct result of a deliberate build-up of policy credibility, including a lower inflation target, a primary budget surplus that has been widening since 2023/24 after 15 years of deficits and a planned fiscal trajectory that will see government debt peak at 78.9% of GDP this year before falling towards 75% by the end of the decade.” The resilience is now being extended to fuel security, with mineral & petroleum resources minister Gwede Mantashe having published a draft strategic petroleum stocks policy aimed at ending South Africa’s “voluntary approach to fuel stockholding, requiring the state to hold 60 days of strategic crude and refined product reserves and private wholesalers to hold a further 21 days at their own cost, the country’s first increase in strategic reserves since the 1970s”. The conflict in the Middle East, which disrupted global supply chains, has seen South Africans paying more for fuel, transport and food. Mavuso noted that the South African Reserve Bank’s newly appointed head of economic research, Konstantin Makrelov, had highlighted the country’s improved fiscal metrics for resilience at the African Economic Conference in Abidjan last week. “He said that South Africa is far better placed to absorb a shock with sound fiscal and monetary policy than with a rising debt-to-GDP ratio or high inflation and pointed to the market’s punishing reaction to the 2015 removal of finance minister Nhlanhla Nene as proof that credibility, once lost, is costly to win back,” she said. “The fiscal discipline has also brought credit rating upgrades: S&P upgraded South Africa’s long-term foreign currency credit rating by one notch in November 2025 ― its first upgrade in two decades ― while Moody’s revised its outlook from stable to positive in late May 2026 and Fitch upgraded South Africa’s long-term credit rating on June 5, its first upgrade in 21 years.” She said reforms in the financial sector have added to this resilience, particularly those related to the Financial Action Task Force requirements. “Deposit insurance is now operational through the Corporation for Deposit Insurance and the country has built out its emergency liquidity and resolution frameworks. “These reforms have strengthened an already sophisticated and well-respected financial services sector with strong companies and institutions, including the Reserve Bank, National Treasury and Prudential Authority.” She noted, however, that a real difficulty with South Africa’s ambitious reform programme, particularly in the areas of energy, transport, water and local government, “is that they are complex, often involving multiple layers that take time to implement fully and the results will therefore be felt only over the longer term”. “The more parts of the wide reform programme that are successfully implemented the further along we’ll be in developing an efficient backbone to the economy, on which businesses can operate efficiently and drive faster economic growth. That, in the end, is the best way to create jobs and make a meaningful impact on the unemployment rate.” Mavuso added: “We cannot control global events and more external shocks will come our way. What we can control is how prepared we are when the next shock arrives. “We are on the right path in the fiscal space and heading in the right direction with reforms. The more we work together as a country, the more successful we will be in addressing problem areas and setting the foundations from which future generations can prosper.” Econometrix chief economist Azar Jammine said the broader reforms in the economy have helped to some extent. Also important are perceptions that the National Treasury under the government of national unity is adopting a fiscally responsible approach, which has strengthened the rand and kept inflation low, he said. “The prices of gold and platinum are double what they were a year ago. The economy is not collapsing, but economic growth is still around 1%,” Jammine said.Raymond Parsons, economics professor at the North West University Business School, said: “Assessing South Africa’s degree of economic resilience means tracking a mix of institutional ‘shock absorbers’ and structural reform initiatives. The country’s basic economic buffers have enabled it to largely withstand global headwinds like the current international energy crisis.”Parsons said South Africa’s economic resilience is ultimately based on tangible credibility in several areas of policy. “These include stable capital markets, a prudent fiscal policy, the pace of growth-friendly reforms and a predictable monetary policy,” he said.“These have helped the economy to cope with renewed geopolitical tensions and their implications in recent months. As a small, open economy South Africa has nonetheless experienced severe economic pain as a result of global setbacks in the past few months. “Growth forecasts for 2026 have inevitably been generally cut for now and inflation has risen. Yet these setbacks, though regrettable, are manageable. The incipient though modest economic recovery that was apparent earlier in the year has been interrupted, rather than derailed, by recent global headwinds. It is the existence of resilience and economic buffers that will make this possible.“However, if the economy resumes its positive but gradual upswing later in the year, the challenge remains for it to break out of its present narrow 1%-2% growth corridor by continuing to implement the right economic policies,” Parsons said.Business Day